The European Securities and Markets Authority (ESMA) has written to the European Commission to raise its concern over the potential establishment of networks of systematic internalisers (SIs) by investment firms to circumvent certain MIFID II obligations;
in particular, the requirements for investment firms operating internal matching systems and executing client orders on a multilateral basis to be authorised as trading venues, and the trading obligation for shares.
In the letter, ESMA asks the European Commission to consider whether there is a need for the Commission to take action to address this issue, such as clarifying certain MiFID II definitions.
ESMA also states that it will closely monitor developments in this area and may, in the future, clarify the scope of SIs’ permitted activities and the characteristics of multilateral systems via its Questions and Answers documents.