Guidance to Applications for Approval of Member Firms Provision
of Direct Market Access
September 2012
Pursuant to the Oslo Børs Member and Trading Rules Version 1.2 member firms
may, subject to certain conditions as further set out in Rule 2103, allow a customer to
submit orders to the trading system under the member firm’s trading codes by way of
direct market access. Member firms are, prior to commencing direct market access
activities, required to apply for approval by Oslo Børs.
Provision of direct market access provided by a member firm to other member firms or
to, or via (routing systems or other systems operated by or in agreement with),
regulated markets, multilateral trading facilities or other similar organised trading
facilities, must be approved by Oslo Børs in each case (i.e. in respect of each customer).
Provision of direct market access to other customer categories will be granted on a
general basis (i.e. not on a customer-by-customer basis).
For a discussion of certain transitional arrangements, see Circular No. 7/2012(1).
Below is a list of information that Oslo Børs expects member firms to provide in their
applications for approval of direct market access activities. Oslo Børs may require
additional information to inter alia satisfy itself that member firms direct market access
activities does not represent a risk to the orderly functioning of its markets (including
with respect to systemic risks and market surveillance), and that the member firms
direct market access activities does not otherwise conflict with maintaining the integrity,
transparency and good reputation of its markets.
(1)
Available at: http://www.oslobors.no/ob_eng/content/view/full/63430
OSLO BØRS ASA Postboks 460 Sentrum, 0105 Oslo. Besøksadr.: Tollbugata 2, Oslo
Tlf: +47 22 34 17 00 Faks: +47 22 41 65 90 Org.nr.: NO 983 268 633 www.oslobors.no
Information to be Provided in Applications
(With respect to direct market access to be provided by a member firm to other member
firms or to, or via (routing systems or other systems operated by or in agreement with),
regulated markets, multilateral trading facilities or other similar organised trading
facilities, the information must be provided per customer)
Prevention of Submission
of Erroneous Orders
The application should include a description of the
controls and system alerts applied by the member firm
to prevent submission of erroneous orders by the
customer(s), such as with respect to:
prevention of submission of an order if the
customer has overridden alerts and/or notification
to the member firm that the customer has
attempted to override the alert;
the segregation of order flow by the use of the
trader group facility within the trading system;
training, education and guidance provided to the
customer(s) entering orders;
requirements as to order acknowledgements from
the customer(s);
controls over maximum order sizes that can be
submitted by the customer(s);
controls over prices of orders;
system parameters that would generate an alert if
the order would execute at a price with which the
member firm would not be satisfied;
monitoring and controls over the total exposure of
the member firm to orders routed for the
customer(s);
access controls over order entry which the member
firm require the customer(s) to apply (e.g. use of
authentication codes);
allocation of responsibility for dealing with actions
and errors.
Mechanisms Enabling
the Member Firm to
Restrict and Delete
Customer(s) Orders
The application should include a description of the
mechanisms applied to enable the member firm to
delete a customer’s orders from the trading system,
and to restrict a customer’s ability to submit orders to
the trading system.
845345
2/3
Due Diligence
The application should include a description of the due
diligence arrangements in place between the member
firm and the customer(s), including a description of the
measures in place to secure customer(s) fit and
properness for the use of direct market access.
Identification of
Customer Categories
The application should include a brief description of the
categories of customers to which direct market access
is to be offered.
Written Routines
The member firms written routines for its direct market
activities should be enclosed with the application.
In relation to
MTR 2103.2 please provide
The identification of the customer in question.
An approval will only be grated if the Exchange, on the
basis of the application, is satisfied that inter alia the
provision of such services by the member firm does not
present a risk to the orderly functioning of the
Exchange’s markets (including in respect to systemic
risks and market surveillance).
The member firm’s provision of such services must not
otherwise conflict with maintaining the integrity,
transparency and good reputation of the Exchange’s
markets, and is subject to the standard terms and
conditions for such activities as set by the Exchange
from time to time.
845345
3/3