Commission Delegated Regulation (EU) 2017/584 Article 20: Pre-trade and post-trade controls (Article 48(4) and (6) of Directive 2014/65/EU)

Article 20 - Pre-trade and post-trade controls (Article 48(4) and (6) of Directive 2014/65/EU)

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Article 20

Pre-trade and post-trade controls (Article 48(4) and (6) of Directive 2014/65/EU)

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1. Trading venues shall carry out the following pre-trade controls adapted for each financial instruments traded on them:

((a))

price collars, which automatically block orders that do not meet pre-set price parameters on an order-by-order basis;

((b))

maximum order value, which automatically prevents orders with uncommonly large order values from entering the order book by reference to notional values per financial instrument;

((c))

maximum order volume, which automatically prevents orders with an uncommonly large order size from entering the order book.

2. The pre-trade controls laid down in paragraph 1 shall be designed so as to ensure that:

((a))

their automated application has the ability to readjust a limit during the trading session and in all its phases;

((b))

their monitoring has a delay of no more than five seconds;

((c))

an order is rejected once a limit is breached;

((d))

procedures and arrangements are in place to authorise orders above the limits upon request from the member concerned. Such procedures and arrangements shall apply in relation to a specific order or set of orders on a temporary basis in exceptional circumstances.

3. Trading venues may establish the post-trade controls that they deem appropriate on the basis of a risk assessment of their members' activity.