ESMA_QA_1597

Status: ✅ Answer Published

Link to ESMA Q&A tool: https://www.esma.europa.eu/publications-data/questions-answers/1597

---

Regulatory Context

Regulation : MIF2

Level 1 Regulation: Markets in Financial Instruments Directive II (MiFID II) Directive 2014/65/EU- Secondary Markets

Level 2 Regulation: Regulation 2017/565 - MiFID II Delegated Regulation

Level 3 Regulation: No information available

Topic: Direct Electronic Access and algorithmic trading

Subject Matter: Algorithmic trading

---

Question

Submission Date: 19 December 2016

Does a simple algorithm qualify as algorithmic trading?

---

ESMA Answer

Answer Date: 19-12-2016

[ESMA 70-872942901-38 MiFID II MiFIR market structures Q&A, Q&A 3.1] Yes. The fact that a person or firm undertakes trading activity by means of an algorithm which includes a small number of processes (e.g. makes quotes that replicate the prices made by a trading venue) does not disqualify the firm running such algorithm from being engaged in algorithmic trading.

---

This document was automatically extracted from the ESMA EMIR Q&A database.