# The Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2018, Regulation 9: Algorithmic trading


(1) Regulation 30 is amended as follows.
(2) In paragraph (1)—
(a) in paragraph (a), for “M’s home Member State is” substitute “M is established in”;
(b) for sub-paragraph (b), substitute—
“(b) M falls within paragraph (1A); and”;
(c) in sub-paragraph (c), for “for the purposes of the directive” substitute “to carry on a regulated activity which is any of the investment services and activities”.
(3) After paragraph (1), insert—
“(1A) M falls within this paragraph if M is—
(a) the society incorporated by Lloyd’s Act 1871 known by the name of Lloyd’s;
(b) an authorised person with a Part 4A permission to carry on the regulated activity of—
(i) effecting or carrying out contracts of insurance under article 10 of the Regulated Activities Order;
(ii) insurance risk transformation under article 13A of the Regulated Activities Order;
(iii) managing the underwriting capacity of a Lloyd’s syndicate under article 57 of the Regulated Activities Order,
when carrying on those activities (and any other activities permitted by rules made by the FCA or the PRA under the Act);
(c) an operator (within the meaning of regulation 3(2) of the Greenhouse Gas Emissions Trading Scheme Regulations 2012), subject to compliance obligations under those Regulations who when dealing in emission allowances does not execute client orders and does not provide any investment services or perform any investment activities other than dealing on own account, provided that the operator does not apply a high-frequency algorithmic trading technique;
(d) a collective investment undertaking, pension fund or a depositary or manager of such an undertaking;
(e) a person (“P”)—
(i) dealing on own account, including a market maker, in commodity derivatives or emission allowances or derivatives thereof, excluding a person who deals on own account when executing client orders; or
(ii) providing investment services, other than dealing on own account, in commodity derivatives or emission allowances or derivatives thereof to the customers or suppliers of P’s main business,
provided that in each case the activity in paragraph (i) or (ii), considered both individually and on an aggregate basis, is an ancillary activity to P’s main business, when considered on a group basis, and paragraph (1B) applies.
(1B) This paragraph applies if—
(a) P’s main business is not—
(i) i)the provision of investment services;
(ii) banking activities requiring permission under Part 4A of the Act (or banking activities which would require such permission if they were carried on in the United Kingdom); or
(iii) acting as a market-maker in relation to commodity derivatives;
(b) P does not apply a high-frequency algorithmic trading technique; and
(c) P notifies the FCA under regulation 47 that P is carrying out the activity described in paragraph (1A)(e)(i) and (ii) as an ancillary activity to P’s main business and reports to the FCA upon request the basis on which P considers that this activity is ancillary to P’s main business.”.
(4) In paragraph (6), after “United Kingdom” insert “or in an EEA state”.
(5) Omit paragraph (7).
(6) In paragraph (9), omit “(as defined by Article 4.1.40 (definitions) of the markets in financial instruments directive”)”.
(7) In paragraph (12)—
(a) in the definition of “approved form”, for the words “regulatory technical standards” to the end of the definition, substitute “Article 28 of Regulation (EU) 2017/589;”;
(b) in the definition of “exceptional circumstances”, for the words “regulatory technical standards” to the end of the definition, substitute “Article 3 of Regulation (EU) 2017/578;”;
(c) in the definition of “the specified circumstances”, for the words “regulatory technical standards” to the end of the definition, substitute “Article 1 of Regulation (EU) 2017/578; and”;
(d) in the definition of “the specified content”, for the words “regulatory technical standards” to the end of the definition, substitute “Article 2 of Regulation (EU) 2017/578.”.
(8) In regulation 31, omit paragraph (3).

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Source: https://www.legislation.gov.uk/ukdsi/2018/9780111173480/regulation/9 (the official version)
Page: https://openlegislation.uk/draft-markets-in-financial-instruments-amendment-eu-exit-regulations-2018/regulation-9
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.