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🔗 Back to Summary. 🇫🇷 French Version: 2017R0578_FR.3. Back to Summary of LVL1. Open the PDF. Direct link to EUR-LEX.
Article 2 – Content of market making agreements ⬅️ | ➡️ Article 4 – Identification of exceptional circumstances
Article 3 - Exceptional circumstances
The obligation for investment firms to provide liquidity on a regular and predictable basis laid down in EU shall not apply in any of the following exceptional circumstances:
(a)
a situation of extreme volatility triggering volatility mechanisms for the majority of financial instruments or underlyings of financial instruments traded on a trading segment within the trading venue in relation to which the obligation to sign a market making agreement applies;
(b)
war, industrial action, civil unrest or cyber sabotage;
(c)
disorderly trading conditions where the maintenance of fair, orderly and transparent execution of trades is compromised, and evidence of any of the following is provided:
(i)
the performance of the trading venue’s system being significantly affected by delays and interruptions;
(ii)
multiple erroneous orders or transactions;
(iii)
the capacity of a trading venue to provide services becoming insufficient;
(d)
where the investment firm’s ability to maintain prudent risk management practices is prevented by any of the following:
(i)
technological issues, including problems with a data feed or other system that is essential to carry out a market making strategy;
(ii)
risk management issues in relation to regulatory capital, margining and access to clearing,
(iii)
the inability to hedge a position due to a short selling ban;
(e)
for non-equity instruments, during the suspension period referred to in 2014 of the European Parliament and of the Council
.