ESMA yesterday issued the final report on the MIFID II algorithmic trading rules which can be found here. This follows a consultation earlier in the year. The accompanying press release draws attention to the following topics:

• the concepts of “algorithmic trading” and “Direct Electronic Access”
• the authorisation regime for EU and non-EU algorithmic trading firms (including HFT firms) deploying their strategies on EU trading venues
• the organisational requirements for investment firms, including the notification and testing requirements of algorithmic traders to competent authorities; and, the self-assessment exercises to be performed by investment firms
• organisational requirements for trading venues, including the self-assessment exercises to be performed by trading venues, circuit breakers, the fee structures, order to trade ratios; and market outages
• a review of MiFID II provisions which are indirectly relating to algorithmic trading activities (e.g. tick size and market making)

Under MIFID II Article 1(5) the rules in MIFID II applicable to algorithmic trading (Articles 17(1) to 17(6) and parts of the accompanying delegated act (“RTS 6”) apply to non investment firms using several exemptions, including the Ancillary Activity Exemption in Article 2(1)j. Attention is drawn to the note on page 17 regarding non investment firms as well as the rest of the report.