ESMA_QA_1587
Status: ✅ Answer Published
Link to ESMA Q&A tool: https://www.esma.europa.eu/publications-data/questions-answers/1587
Regulatory Context
Regulation : MIF2
Level 1 Regulation: Markets in Financial Instruments Directive II (MiFID II) Directive 2014/65/EU- Secondary Markets
Level 2 Regulation: No information available
Level 3 Regulation: No information available
Topic: Systematic internaliser regime
Subject Matter: Voluntary SI regime
Question
Submission Date: 03 June 2019
Can an investment firm which decides to opt-in to the systematic internaliser regime determine the instruments on which it will be an SI?
ESMA Answer
Answer Date: 03-06-2019
[ESMA 70-872942901-35 MiFIR transparency Q&A, Q&A 7.11a] Article 4(1)(20) of MiFID II specifies that investment firms can voluntarily opt-in under the systematic internaliser regime (voluntary systematic internaliser regime). Such opt-in is not limited to instruments that are TOTV but includes all financial instruments, i.e. TOTV and non-TOTV instruments. ESMA considers that an investment firm that voluntarily opts-in under the systematic internaliser regime can decide in which specific instruments (TOTV and non-TOTV instruments) it choose to be a systematic internaliser and to comply with the related obligations. In case an investment firm opts-in under the systematic internaliser regime for equity instruments (shares, depositary receipts, ETFs, certificates, other similar financial instruments), the investment firm can choose for which instruments to be a systematic internaliser and to comply with the related obligations. In case an investment firm opts-in under the systematic internaliser regime for derivatives, the investment firm can choose the individual derivatives for which it opts-in and for which it should comply with the related obligations. In other words, the investment firm is not bound to opt-in for the entire sub-class of derivatives to which the individual derivatives belong to. In case an investment firm opts-in under the systematic internaliser regime for emission allowances, the investment firm can choose the individual emission allowances for which it opts-in and for which it should comply with the related obligations. In other words, the investment firm is not bound to opt-in for the entire sub-asset class of emission allowances to which the individual emission allowances belong to. In case an investment firm opts-in under the systematic internaliser regime for securitised derivatives, the investment firm can choose the individual securitised derivatives for which it opts-in and for which it should comply with the related obligations. In other words, the investment firm is not bound to opt-in for the entire asset class of securitised derivatives. In case an investment firm opts-in under the systematic internaliser regime for bonds, the investment firm can choose the individual bonds for which it opts-in and for which it should comply with the related obligations. In other words, the investment firm is not bound to opt-in for all bonds issued by the same entity or by any entity within the same group for the same bond type. In case an investment firm opts-in under the systematic internaliser regime for structured finance products (SFP), the investment firm can choose the individual SFPs for which it opts-in and for which it should comply with the related obligations. In other words, the investment firm is not bound to opt-in for all SFPs issued by the same entity or by any entity within the same group. Investment firms that voluntarily opt-in under the systematic internaliser regime in specific instruments are nevertheless expected to perform the quarterly test for those instruments and, if the pre-set limits for a frequent and systematic basis and for a substantial basis are both crossed, they qualify as systematic internalisers under the mandatory regime.
This document was automatically extracted from the ESMA EMIR Q&A database.