AI Summary of Article 31 Monitoring of compliance with the rules of the MTF or the OTF and with other legal obligations
Member States are mandated to ensure that investment firms and market operators managing Multilateral Trading Facilities (MTFs) or Organised Trading Facilities (OTFs) implement robust monitoring systems to ensure compliance with established rules. These arrangements should include oversight of orders, transactions, and potential misconduct, while also adhering to data quality standards as required by Regulation (EU) No 600/2014.
Furthermore, these entities must promptly report significant rule infringements or disorderly trading to their competent authority, which in turn communicates this information to ESMA and other Member States. They are also required to assist authorities investigating market abuse, thereby strengthening the integrity of financial markets.
Article 31 Monitoring of compliance with the rules of the MTF or the OTF and with other legal obligations
1. Member States shall require that investment firms and market operators operating an MTF or OTF establish and maintain effective arrangements and procedures, relevant to the MTF or OTF, for the regular monitoring of the compliance by its members or participants or users with its rules. Investment firms and market operators operating an MTF or an OTF shall monitor the orders sent, including cancellations and the transactions undertaken by their members or participants or users under their systems, in order to identify infringements of those rules, disorderly trading conditions, conduct that may indicate behaviour that is prohibited under Regulation (EU) No 596/2014 or system disruptions in relation to a financial instrument and shall deploy the resource necessary to ensure that such monitoring is effective.
Member States shall require that investment firms and market operators operating an MTF or an OTF have arrangements in place to ensure that they meet data quality standards pursuant to Article 22b of Regulation (EU) No 600/2014.