MiFID II - Direct electronic access

MiFID II will bring about important changes in the market structure of European capital markets. Under MiFID II, direct electronic access is defined and the rules for direct electronic access to trading systems have been tightened. Investment firms that provide direct electronic access have to notify the AFM.

Direct electronic access (DEA) means that a member, participant or client of a trading venue (the provider) allows a legal entity or natural person to make use of its trading code (access). As a result, this legal entity or natural person can pass orders on directly to a trading venue, possibly thereby making use of the infrastructure of the provider or a connection system that has been made available by the provider.

Part of using DEA is that the legal entity or natural persons using the trading code are able to determine the exact fraction of a second of order entry and the lifetime of the orders.


The investment firms that offer direct electronic access remain responsible for orders that are placed by their clients by making use of their systems and/or their trading codes. They must draw up criteria regarding the appropriateness of the parties to whom direct access is being provided. The investment firm must also ensure that clients who make use of direct electronic access comply with the MiFID II rules and the rules of the trading venue. In addition, they must build in risk controls and threshold values and be able to terminate the access of individual clients.

Trading venues must also build in risk controls and threshold values for direct access to trading. In addition, they must draw up rules that ensure that providers of direct electronic access comply with the MiFID II rules. When a provider does not comply with the rules of the trading venue, the venue must be able to suspend or terminate the provision of direct access by the provider to its client.

Under MiFID II, proprietary traders who have direct electronic access to a trading venue are in principle required to have a licence and must satisfy ongoing requirements.

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