• MIR 3 MIR 3 RULES APPLICABLE TO RECOGNISED INVESTMENT EXCHANGES

    • MIR 3.1 MIR 3.1 Introduction

      • MIR 3.1.1

        This chapter contains additional Recognition Requirements applicable to Recognised Investment Exchanges.

    • MIR 3.2 MIR 3.2 Capital requirements

      • MIR 3.2.1

        A Recognised Investment Exchange shall hold the following capital:

        (a) an amount equal to 6 months' operational expenses; plus
        (b) unless the Regulator directs otherwise, an additional buffer amount of up to a further 6 months' operational expenses.

      • MIR 3.2.2

        For the purposes of this Rule, operational expenses shall be considered in accordance with:

        (a) International Financial Reporting Standards (IFRS);
        (b) generally accepted accounting principles of a third country determined by the Regulator to be equivalent to IFRS; or
        (c) accounting standards of a third country the use of which is permitted by the Regulator.

      • MIR 3.2.3

        Recognised Investment Exchanges shall use the most recent audited information from their annual financial statement.

    • MIR 3.3 MIR 3.3 Fair and orderly trading

      • MIR 3.3.1

        A Recognised Investment Exchange must ensure that it has transparent and non-discretionary rules and procedures to provide for fair and orderly trading, and to establish objective criteria for the efficient execution of orders.

      • MIR 3.3.2

        In determining whether a Recognised Investment Exchange is ensuring that business conducted by means of its facilities is conducted in an orderly manner (and so as to afford proper protection to investors), the Regulator may have regard to the extent to which the Recognised Investment Exchange's rules and procedures:

        (a) are consistent with the Rules of Market Conduct;
        (b) prohibit abusive trading practices or the deliberate reporting or publication of false information about trades;
        (c) prohibit or prevent:
        (i) trades in which a party is improperly indemnified against losses;
        (ii) trades intended to create a false appearance of trading activity ("wash trades");
        (iii) cross trades executed for improper purposes;
        (iv) improperly prearranged or pre-negotiated trades;
        (v) trades intended to assist or conceal any potentially identifiable trading abuse ("accommodation trades"); and
        (vi) trades which one party does not intend to close out or settle.
        (d) include appropriate measures to prevent the use of its facilities for abusive or improper purposes;
        (e) provide appropriate safeguards for investors against fraud or misconduct, recklessness, negligence or incompetence by users of its facilities;
        (f) provide appropriate information to enable users of its facilities to monitor their use of the facilities;
        (g) include appropriate arrangements to enable users of its facilities to raise queries about any use of those facilities which they are reported to have made;
        (h) include appropriate arrangements to enable users of its facilities to comply with any relevant regulatory or legal requirements; and
        (i) include appropriate arrangements to reduce the risk that those facilities will be used in ways which are incompatible with relevant regulatory or legal requirements,

        and in this paragraph "appropriate" should be taken to mean appropriate having regard to the nature and scale of the Recognised Body's facilities, the types of Persons who will use the facilities and the use which they will make of those facilities.

      • MIR 3.3.3

        In determining whether a Recognised Investment Exchange is ensuring that business conducted by means of its facilities is conducted in an orderly manner (and so as to afford proper protection to investors), the Regulator may have regard to whether the Recognised Investment Exchange's arrangements and practices:

        (a) enable Members and clients for whom they act to obtain the best price available at the time for their size and type of trade;
        (b) include procedures which enable the Recognised Investment Exchange to influence trading conditions or suspend trading promptly when necessary to maintain an orderly market; and
        (c) if they include arrangements to support or encourage liquidity:
        (i) are transparent;
        (ii) are not likely to encourage any Person to enter into transactions other than for proper trading purposes (which may include hedging, investment, speculation, price determination, arbitrage and filling orders from any client for whom he acts);
        (iii) are consistent with a reliable, undistorted price-formation process; and
        (iv) alleviate dealing or other identified costs associated with trading on the Recognised Investment Exchange's markets and do not subsidise a market position of a user of its facilities.

      • MIR 3.3.4

        The rules of a Recognised Investment Exchange must provide that the Recognised Investment Exchange must not exercise its power to suspend or remove from trading on a regulated market operated by it any Financial Instrument which no longer complies with its rules, where such step would be likely to cause significant damage to the interests of investors or the orderly functioning of the financial markets.

    • MIR 3.4 MIR 3.4 Rules Applicable to Recognised Investment Exchanges that are also MTF or OTF Operators and rules on Trade Repositories

      • MIR 3.4.1

        A Recognised Investment Exchange may carry on the Regulated Activity of operating a MTF or OTF provided that its Recognition Order includes a stipulation permitting it to do so. If it does include such a stipulation, the specific rules on MTFs and OTFs in COBS will apply to that function, but that function only. 

      • MIR 3.4.1A [Deleted]

        Amended on (24 February, 2020).

      • MIR 3.4.1B [Deleted]

        Amended on (24 February, 2020).

      • MIR 3.4.2

        A Recognised Investment Exchange operating an MTF or an OTF, must also operate a market that complies with the Recognition Requirements.

        Amended on (24 February, 2020).

      • MIR 3.4.3

        A Recognised Body may also act as a Trade Repository if its Recognition Order includes a stipulation permitting it to do so. Acting as a Trade Repository will result in it being subject to the additional conduct requirements in Appendix 2 of GEN.

    • MIR 3.5 MIR 3.5 Pre-trade transparency obligations

      • MIR 3.5.1

        Recognised Investment Exchanges shall, in relation to Financial Instruments traded on its systems, make public:

        (a) the information specified in Rule 3.5.4;
        (b) the information specified in Rule 3.5.5; and
        (c) current bid and offer prices and the depth of trading interests at those prices which are advertised through their systems.

      • MIR 3.5.2

        Market operators and investment firms operating a trading venue shall make that information available to the public on a continuous basis during normal trading hours.

      • MIR 3.5.3

        The transparency requirements shall be calibrated for different types of trading systems including continuous auction order-book, quote-driven, periodic auction and hybrid trading systems.

      • MIR 3.5.4 General requirements

        (a) Where the Recognised Investment Exchange operates a continuous auction order book trading system, it shall, for each Financial Instrument, make public continuously throughout its normal trading hours the aggregate number of orders and of the Financial Instruments those orders represent at each price level, for the five best bid and offer price levels.
        (b) Where the Recognised Investment Exchange operates a quote-driven trading system, it shall, for each Financial Instrument, make public continuously throughout its normal trading hours the best bid and offer by price of each market maker in that Financial Instrument, together with the volumes attaching to those prices. The quotes made public shall be those that represent binding commitments to buy and sell the Financial Instruments and which indicate the price and volume of Financial Instruments in which the registered market makers are prepared to buy or sell. In exceptional market conditions, however, indicative or one-way prices may be allowed for a limited time.
        (c) Where the Recognised Investment Exchange operates a periodic auction trading system, it shall, for each Financial Instrument, make public continuously throughout its normal trading hours the price that would best satisfy the system's trading algorithm and the volume that would potentially be executable at that price by participants in that system.
        (d) Where the Recognised Investment Exchange operates a trading system which is not wholly covered by paragraphs (b) or (c) or (d), either because it is a hybrid system falling under more than one of those paragraphs or because the price determination process is of a different nature, it shall maintain a standard of pre-trade transparency that ensures that adequate information is made public as to the price level of orders or quotes for each Financial Instrument, as well as the level of trading interest in that Financial Instrument.

        In particular, the five best bid and offer price levels and/or two-way quotes of each market maker in that Financial Instrument shall be made public, if the characteristics of the price discovery mechanism permit it.
        (e) A summary of the information to be made public in accordance with paragraphs (b) to (e) is specified in the table in Rule 3.5.5.

      • MIR 3.5.5 Information to be made public

        Type of system Description of system Summary of information to be made public
        Continuous auction order book trading system A system that by means of an order book and a trading algorithm operated without human intervention matches sell orders with matching buy orders on the basis of the best available price on a continuous basis. The aggregate number of orders and the Financial Instruments they represent at each price level, for at least the five best bid and offer price levels.
        Quote-driven trading system A system where transactions are concluded on the basis of firm quotes that are continuously made available to participants, which requires the market makers to maintain quotes in a size that balances the needs of Members and participants to deal in a commercial size and the risk to which the market maker exposes itself. The best bid and offer by price of each market maker in that Financial Instrument, together with the volumes attaching to those prices.
        Periodic auction trading system A system that matches orders on the basis of a periodic auction and a trading algorithm operated without human intervention. The price at which the auction trading system would best satisfy its trading algorithm and the volume that would potentially be executable at that price.
        Trading system not covered by first three rows A hybrid system falling into two or more of the first three rows or a system where the price determination process is of a different nature than that applicable to the types of system covered by the first three rows. Adequate information as to the level of orders or quotes and of trading interest; in particular, the five best bid and offer price levels and/or two way quotes of each market maker in the Financial Instrument, if the characteristics of the price discovery mechanism so permit.

      • MIR 3.5.6

        A waiver from pre-transparency obligations should not enable investment firms to avoid such obligations in respect of those transactions in liquid Financial Instruments which they conclude on a bilateral basis under the rules of a Recognised Investment Exchange where, if carried out outside the rules of the Recognised Investment Exchange, those transactions would be subject to the requirements to publish quotes.

      • Waivers

        • MIR 3.5.7 Waivers based on market model and type of order or transaction

          Waivers may be granted by the Regulator in respect of shares, depository receipts, ETFs, certificates and other similar Financial Instruments, for any of the following:

          (a) systems matching orders based on a trading methodology by which the price of the Financial Instrument is derived from the trading venue where that Financial Instrument was first admitted to trading or the most relevant market in terms of liquidity, where that reference price is widely published and is regarded by market participants as a reliable reference price;
          (b) systems that formalise negotiated transactions, which are:
          (i) made within the current volume weighted spread reflected on the order book or the quotes of the market makers of the trading venue operating that system, subject to a volume cap to be determined by the Regulator to ensure that the use of this waiver does not unduly harm price formation;
          (ii) in an illiquid share, depository receipt, ETF, certificate or other Financial Instrument that does not fall within the meaning of a liquid market, and are dealt within a percentage of a suitable reference price, being a percentage and a reference price set in advance by the system operator; and
          (iii) subject to conditions other than the current market price of that Financial Instrument;
          (c) orders that are large in scale compared with normal market size; or
          (d) orders held in an order management facility of the Recognised Investment Exchange pending disclosure.

          Waivers may be granted by the Regulator in respect of other Financial Instruments, for any of the following:

          (e) orders that are large in scale compared with normal market size; and orders held in an order management facility of the Recognised Investment Exchange pending disclosure;
          (f) actionable indications of interest in request-for-quote and voice trading systems that are above a size specific to the Financial Instrument, which would expose liquidity providers to undue risk and takes into account whether the relevant market participants are retail or wholesale investors; or
          (g) Financial Instruments for which there is not a liquid market.

        • MIR 3.5.8

          For the purpose of Rule 3.5.7, a negotiated transaction shall mean a transaction involving Members or participants of a Recognised Investment Exchange which is negotiated privately but executed within the Recognised Investment Exchange and where that Member or participant in doing so undertakes one of the following tasks:

          (a) dealing on own account with another Member or participant who acts for the account of a client;
          (b) dealing with another Member or participant, where both are executing orders on own account;
          (c) acting for the account of both the buyer and seller;
          (d) acting for the account of the buyer, where another Member or participant acts for the account of the seller; or
          (e) trading for own account against a client order.

      • References to negotiated transaction

        • MIR 3.5.9

          Transactions related to an individual Financial Instrument in a portfolio trade and volume weighted average price transactions:

          (a) A transaction related to an individual Financial Instrument in a portfolio trade shall be considered, for the purposes of Rule 3.5.7, as a transaction subject to conditions other than the current market price.
          (b) A volume weighted average price transaction shall be considered, for the purposes of Rule 3.5.7, as a transaction subject to conditions other than the current market price.

        • MIR 3.5.10 Waivers in relation to transactions which are large in scale

          An order shall be considered to be large in scale compared with normal market size if it is equal to or larger than the minimum size of order specified in Rule 3.5.11. For the purposes of determining whether an order is large in scale compared to normal market size, all Financial Instruments admitted to trading on a regulated market shall be classified in accordance with their average daily turnover, which shall be calculated in accordance with the procedure set out in Rule 3.5.11.

        • MIR 3.5.11 Orders large in scale compared with normal market size

          Class in terms of average daily turnover (ADT) ADT < €500 000 €500 000 <
          ADT <
          €1 000 000
          €1 000 000 <
          ADT <
          €25 000 000
          €25 000 000 < ADT < €50 000 000 ADT <
          €50 000 000
          Minimum size of order qualifying as large in scale compared with normal market size €50 000 €100 000 €250 000 €400 000 €500 000

        • MIR 3.5.12 Orders large in scale compared with normal market size

          Class in terms of average daily turnover (ADT) ADT < USD 500 000 USD 500 000 < ADT < USD 1 000 000 USD 1 000 000 < ADT < USD 25 000 000 USD 25 000 000 < ADT < USD 50 000 000 ADT > USD 50 000 000
          Minimum size of order qualifying as large in scale compared with normal market size USD 50 000 USD 100 000 USD 250 000 USD 400 000 USD 500 000

    • MIR 3.6 MIR 3.6 Post-trade transparency obligation

      • MIR 3.6.1 MIR 3.6.1

        The Recognised Investment Exchange must make arrangements for the price, volume and time of transactions executed in Financial Instruments to be made available to the public as close to real-time as technically possible assuming a reasonable level of efficiency and of expenditure on systems on the part of the Person concerned, provided that:

        (a) post-trade information relating to such transactions shall be made available in any case within three minutes of the relevant transaction;
        (b) information relating to a portfolio trade shall be made available with respect to each constituent transaction as close to real time as possible, having regard to the need to allocate prices to particular Financial Instruments; and
        (c) post-trade information referring to transactions taking place on a Recognised Investment Exchange but outside its normal trading hours shall be made public before the opening of the next trading day of the Recognised Investment Exchange on which the transaction took place.

        • Deferrals

        • Waivers

          • MIR 3.6.2

            The Regulator may authorise a Recognised Investment Exchange to provide for deferred publication of the details of transactions based on the size or type of the transaction. In particular, the Regulator may authorise the deferred publication in respect of transactions that:

            (a) are large in scale compared with the normal market size for that Financial Instrument;
            (b) are related to Financial Instrument traded on a trading venue for which there is not a liquid market; or
            (c) are above a size specific to that Financial Instrument which would expose liquidity providers to undue risk and takes into account whether the relevant market participants are retail or wholesale investors.

          • MIR 3.6.3

            Recognised Investment Exchanges shall obtain the Regulator's prior approval of proposed arrangements for deferred trade-publication, and shall clearly disclose those arrangements to market participants and the public.

          • MIR 3.6.4

            If a Recognised Investment Exchange decides to provide investment firms and credit institutions details of transactions in Financial Instruments, it must do so on reasonable commercial terms and on a non-discriminatory basis. This requirement may be waived or deferred in respect of large volume or for certain types of trades, as specified by the Regulator, in which case the Recognised Investment Exchange must ensure that the existence of and the terms of the deferral are disclosed to users and Members of their facilities and to investors.

          • MIR 3.6.5

            Recognised Investment Exchanges shall, with regard to transactions in respect of Financial Instruments admitted to trading on or concluded within their systems, make public the following details:

            (a) the details specified in Rule 3.6.6;
            (b) an indication that the exchange of Financial Instruments is determined by factors other than the current market valuation of the Financial Instrument, where applicable;
            (c) an indication that the trade was a negotiated trade, where applicable; and
            (d) any amendments to previously disclosed information, where applicable.

            Those details shall be made public either by reference to each transaction or in a form aggregating the volume and price of all transactions in the same Financial Instrument taking place at the same price at the same time.

          • MIR 3.6.6 Post-trade information:

            (a) Trading Day The trading day on which the transaction was executed.
            (b) Trading Time The time at which the transaction was executed, reported in the local time of the competent authority to which the transaction will be reported, and the basis in which the transaction is reported expressed as Co-ordinated Universal Time (UTC) +/- hours.
            (c) Instrument Identification This shall consist of a unique code to be decided by the Regulator identifying the Financial Instrument which is the subject of the transaction; or, if the Financial Instrument in question does not have a unique identification code, the report must include the name of the Financial Instrument.
            (d) Unit Price The price per Financial Instrument excluding commission and (where relevant) accrued interest.
            (e) Price Notation The currency in which the price is expressed.
            (f) Quantity The number of units of the Financial Instruments.
            (g) Venue identification Identification of the venue where the transaction was executed. That identification shall consist of the Recognised Investment Exchange's unique harmonised identification code.

          • MIR 3.6.7 Transactions related to an individual Financial Instrument in a portfolio trade and volume weighted average price transactions

            (a) A transaction related to an individual Financial Instrument in a portfolio trade shall be considered as a transaction where the exchange of Financial Instruments is determined by factors other than the current market valuation of the Financial Instrument.
            (b) A volume weighted average price transaction shall be considered as a transaction where the exchange of Financial Instruments is determined by factors other than the current market valuation of the Financial Instrument.

          • MIR 3.6.8 Deferred publication of large transactions

            The deferred publication of information in respect of transactions may be authorised, for a period no longer than the period specified in the table in Rule 3.6.10 for the class of Financial Instrument and transaction concerned, provided the following criteria are satisfied:

            (a) the transaction is between an investment firm dealing on own account and a client of that firm; and
            (b) the size of that transaction is equal to or exceeds the relevant minimum qualifying size, as specified in table in Rule 3.6.9.

            In order to determine the relevant minimum qualifying size for the purposes of point (b), all Financial Instruments admitted to trading on a regulated market shall be classified in accordance with their average daily turnover to be calculated in accordance with Rule 3.6.10.

          • MIR 3.6.9

            Each constituent transaction of a portfolio trade shall be assessed separately for the purposes of determining whether deferred publication in respect of that transaction is available.

          • MIR 3.6.10 Deferred publication thresholds and delays

            The table below shows, for each permitted delay for publication and each class of Financial Instrument in terms of average daily turnover (ADT), the minimum qualifying size of transaction that will qualify for that delay in respect of a Financial Instrument of that type.

              Class of Financial Instruments in terms of average daily turnover (ADT)
              ADT < USD 100 000 USD 100
            000< ADT < USD
            1000 000
            USD
            1 000 000 < ADT < USD 50 000 000
            ADT < USD 50 000 000
              Minimum qualifying size of transaction for permitted delay
            Permitted delay for publication 60 minutes USD 10 000 Greater of 5% of ADT and USD 25 000 Lower of 10% of ADT and USD 3 500 000 Lower of 10% of ADT and USD 7 500 000
            180 minutes USD 25 000 Greater of 15% of ADT and USD 75 000 Lower of 15% of ADT and USD 5 000 000 Lower of 20% of ADT and USD 15 000 000  
            Until end of trading day (or roll-over to noon of next trading day if trade undertaken in final 12 hours of trading day) USD 45 000 Greater of 25% of ADT and USD 100 000 Lower of 25% of ADT and USD 10 000 000 Lower of 30% of ADT and USD 30 000 000  
            Until end of trading day next after trade USD 60 000 Greater of 50% of ADT and USD 100 000 Greater of 50% of ADT and USD 1 000 000 100% of ADT  
            Until end of second trading day next after trade USD 80 000 100% of ADT 100% of ADT 250% of ADT  
            Until end of third trading day next after trade 250% of ADT 250% of ADT      

    • MIR 3.7 MIR 3.7 Public disclosure

      • MIR 3.7.1

        Any arrangement to make information public shall satisfy the following conditions:

        (a) it must include all reasonable steps necessary to ensure that the information to be published is reliable, monitored continuously for errors, and corrected as soon as errors are detected;
        (b) it must facilitate the consolidation of the data with similar data from other sources; and
        (c) it must make the information available to the public on a non-discriminatory commercial basis at a reasonable cost.

      • MIR 3.7.2

        For the purposes of ensuring that published information is reliable, monitored continuously for errors, and corrected as soon as errors are detected, a verification process should be established which does not need to be external from the organisation of the publishing entity, but which should be an independent cross-check of the accuracy of the information generated by the trading process. This process should have the capability to at least identify price and volume anomalies, be systematic and conducted in real-time. The chosen process should be reasonable and proportionate in relation to the business.

      • MIR 3.7.3

        (a) In respect of arrangements facilitating the consolidation of data, the Regulator considers information as being made public, if it:
        (i) is accessible by automated electronic means in a machine-readable way;
        (ii) utilises technology that facilitates consolidation of the data and permits commercially viable usage; and
        (iii) is accompanied by instructions outlining how users can access the information.
        (b) An arrangement fulfils the 'machine-readable' criteria where the data:
        (i) is in a physical form that is designed to be read by a computer;
        (ii) is in a location on a computer storage device where that location is known in advance by the party wishing to access the data; and
        (iii) is in a format that is known in advance by the party wishing to access the data.
        (c) Publication on a non-machine-readable website would not meet the requirements.

      • MIR 3.7.4

        Information that is made public should conform to a consistent and structured format based on industry standards. Recognised Investment Exchanges can choose the structure that they use.

      • MIR 3.7.5 Proper information

        In determining whether appropriate arrangements have been made to make relevant information available to Persons engaged in dealing in Specified Investments admitted to trading on the Recognised Investment Exchange, the Regulator may have regard to:

        (a) the extent to which Members and clients for whom they act are able to obtain information about those Specified Investments, either through accepted channels for dissemination of information or through other regularly and widely accessible communication media, to make a reasonably informed judgment about the value and the risks associated with those Specified Investments in a timely fashion;
        (b) what restrictions, if any, there are on the dissemination of relevant information to the Recognised Investment Exchange's Members and clients for whom they act; and
        (c) whether relevant information is or can be kept to restricted groups of Persons in such a way as to facilitate or encourage dealing in contravention of the Code of Market Conduct.

      • MIR 3.7.6 Own means of dissemination

        Recognised Investment Exchanges do not need to maintain their own arrangements for disseminating news or information about Specified Investments (or underlying assets) to their Members where they have made adequate arrangements for other Persons to do so on their behalf or there are other effective and reliable arrangements for this purpose.

    • MIR 3.8 MIR 3.8 Settlement and Clearing facilitation services

      • MIR 3.8.1

        The Recognised Investment Exchange must ensure that satisfactory arrangements are made for securing the timely discharge (whether by performance, compromise or otherwise), Clearing and settlement of the rights and liabilities of the parties to transactions effected on the Recognised Investment Exchange (being rights and liabilities in relation to those transactions).

      • MIR 3.8.2

        Appropriate links with a Recognised Clearing House or Non-Abu Dhabi Global Market Recognised Clearing House will be deemed sufficient to satisfy this criterion.

      • MIR 3.8.4

        The rules of the Recognised Investment Exchange must permit a Member to use whatever settlement facility they choose for a transaction. This Rule only applies where:
        (a) such links and arrangements exist between the chosen settlement facility and any other settlement facility as are necessary to ensure the efficient and economic settlement of the transaction; and
        (b) the Recognised Investment Exchange is satisfied that the smooth and orderly functioning of the ADGM financial markets will be maintained.

      • MIR 3.8.3 MIR 3.8.3

        If a Recognised Investment Exchange engages a party that is not a Recognised Clearing House or a Non-Abu Dhabi Global Market Clearing House, the Recognised Investment Exchange must confirm to the Regulator, in writing, the satisfactory arrangements made under Rule 3.8.1.

        • Guidance

          The satisfactory arrangements required by Rule 3.8.1 should reference the requirements set out in Rule 4.3.3.

          Amended on (3 February, 2020).

    • MIR 3.9 MIR 3.9 Admission of Financial Instruments to trading

      • MIR 3.9.1 Admission to trading

        (a) The Recognised Investment Exchange must make clear and transparent rules concerning the admission of Financial Instruments to trading on any financial market operated by it.
        (b) The rules must ensure that all Financial Instruments admitted to trading on any regulated market operated by the Recognised Investment Exchange are capable of being traded in a fair, orderly and efficient manner.
        (c) The rules must ensure that:
        (i) all Financial Instruments admitted to trading on a regulated market operated by the Recognised Investment Exchange are freely negotiable; and
        (ii) all contracts for Derivatives admitted to trading on a regulated market operated by the Recognised Investment Exchange are designed so as to allow for their orderly pricing as well as for the existence of effective settlement conditions.
        (d) The Recognised Investment Exchange must maintain effective arrangements to verify that issuers of Financial Instruments admitted to trading on a regulated market operated by it comply with the disclosure obligations.
        (e) The Recognised Investment Exchange must maintain arrangements to assist users of a regulated market operated by it to obtain access to information made public under the disclosure obligations.
        (f) The Recognised Investment Exchange must maintain arrangements regularly to review whether the Financial Instruments admitted to trading on a regulated market operated by it comply with the admission requirements for those instruments.
        (g) The rules must provide that where a Recognised Investment Exchange, without obtaining the consent of the issuer, admits to trading on a regulated market operated by it a Transferable Security which has been admitted to trading on another regulated market, the Recognised Investment Exchange:
        (i) must inform the issuer of that security as soon as is reasonably practicable; and
        (ii) may not require the issuer of that security to demonstrate compliance with the disclosure obligations.
        (h) The rules must provide that where a Recognised Investment Exchange, without obtaining the consent of the issuer, admits to trading on a multilateral trading facility operated by it a Transferable Security which has been admitted to trading on a regulated market, it may not require the issuer of that security to demonstrate compliance with the disclosure obligations.

      • MIR 3.9.2 Transferable securities

        (a) Transferable securities shall be considered freely negotiable if they can be traded between the parties to a transaction, and subsequently transferred without restriction, and if all securities within the same class as the security in question are fungible.
        (b) Transferable securities which are subject to a restriction on transfer shall not be considered as freely negotiable unless the restriction is not likely to disturb the market.
        (c) Transferable securities that are not fully paid may be considered as freely negotiable, if arrangements have been made to ensure that the negotiability of such securities is not restricted and that adequate information concerning the fact that the securities are not fully paid, and the implications of that fact for shareholders, is publicly available.
        (d) When exercising its discretion whether to admit a Financial Instrument to trading, a regulated market shall, in assessing whether the Financial Instrument is capable of being traded in a fair, orderly and efficient manner, take into account the following:
        (i) the distribution of those Financial Instruments to the public; and
        (ii) such historical financial information, information about the issuer, and information providing a business overview as is required to be prepared under the GPM or is or will be otherwise publicly available.
        (e) A Transferable Security that is officially listed in accordance with Part 6 of FSMR, and the listing of which is not suspended, shall be deemed to be freely negotiable and capable of being traded in a fair, orderly and efficient manner.
        (f) When assessing whether a Transferable Security is capable of being traded in a fair, orderly and efficient manner, the regulated market shall take into account, whether the following criteria (if relevant to the particular kind of Financial Instrument) are satisfied:
        (i) the terms of the Financial Instrument are clear and unambiguous and allow for a correlation between its price and the price or other value measure of the underlying Financial Instrument;
        (ii) the price or other value measure of the underlying Financial Instrument is reliable and publicly available;
        (iii) there is sufficient information publicly available of a kind needed to value the Financial Instrument;
        (iv) the arrangements for determining the settlement price of the Financial Instrument ensure that this price properly reflects the price or other value measure of the underlying; and
        (v) where the settlement of the Financial Instrument requires or provides for the possibility of the delivery of an underlying security or asset rather than cash settlement, there are adequate settlement and delivery procedures for that underlying as well as adequate arrangements to obtain relevant information about that underlying.

      • MIR 3.9.3 Units in collective investment undertakings

        (a) When assessing whether units in an open-ended collective investment undertaking are capable of being traded in a fair, orderly and efficient manner in accordance with (see Rule 3.9.1), the regulated market shall take the following aspects into account:
        (i) the distribution of those units to the public;
        (ii) whether there are appropriate market-making arrangements, or whether the management company of the scheme provides appropriate alternative arrangements for investors to redeem the units; and
        (iii) whether the value of the units is made sufficiently transparent to investors by means of the periodic publication of the net asset value.
        (b) When assessing whether units in a closed-end collective investment undertaking are capable of being traded in a fair, orderly and efficient manner, in accordance with (see Rule 3.9.1), the regulated market shall take the following aspects into account:
        (i) the distribution of those units to the public; and
        (ii) whether the value of the units is made sufficiently transparent to investors, either by publication of information on the fund's investment strategy or by the periodic publication of net asset value.

      • MIR 3.9.4 Derivatives

        When admitting to trading a Financial Instrument that is a Derivative, regulated markets shall verify that the following conditions are satisfied:

        (a) the terms of the contract establishing the Financial Instrument must be clear and unambiguous, and enable a correlation between the price of the Financial Instrument and the price or other value measure of the underlying;
        (b) the price or other value measure of the underlying must be reliable and publicly available or ascertainable; or the contract establishing that instrument must be likely to provide a means of disclosing to the market, or enabling the market to assess, the price or other value measure of the underlying, where the price or value measure is not otherwise publicly available;
        (c) sufficient information of a kind needed to value the Derivative must be publicly available or ascertainable;
        (d) the arrangements for determining the settlement price of the contract must be such that the price properly reflects the price or other value measure of the underlying or reference;
        (e) the regulated market must ensure that appropriate supervisory arrangements are in place to monitor trading and settlement in such Financial Instruments;
        (f) the regulated market must ensure that settlement and delivery, whether physical delivery or by cash settlement, can be effected in accordance with the contract terms and conditions of those Financial Instruments; and
        (g) where the settlement of the Derivative requires or provides for the possibility of the delivery of an underlying security or asset rather than cash settlement, there must be adequate arrangements to enable market participants to obtain relevant information about that underlying, as well as adequate settlement and delivery procedures for the underlying.

      • MIR 3.9.5 Rules concerning the admission of Financial Instruments to trading on an MTF

        When determining, for the purposes of Rule 3.3.1, whether a Recognised Investment Exchange has clear and transparent rules concerning the admission of Financial Instruments to trading on any Multilateral Trading Facility operated by it, the Regulator may have regard to:

        (a) whether there is a sufficient range of Persons already holding the Financial Instrument (or, where relevant, the underlying asset) or interested in dealing in it to bring about adequate forces of supply and demand;
        (b) the extent to which there are any limitations on the Persons who may hold or deal in the Financial Instrument, or the amounts of the Financial Instrument which may be held; and
        (c) whether the Recognised Investment Exchange has adequate procedures for obtaining information relevant for determining whether or not to suspend or discontinue trading in that Financial Instrument.

    • MIR 3.10 MIR 3.10 Default Rules

      • MIR 3.10.1

        A Recognised Investment Exchange must have legally enforceable Default Rules which, in the event of a Member of the Recognised Investment Exchange being or appearing to be unable to meet his obligations in respect of one or more market contracts, enable it to suspend or terminate such Member's Membership and cooperate by sharing information with its Recognised Clearing House.

      • MIR 3.10.2

        The Recognised Investment Exchange must issue a public notice on its website in respect of any Member whose Membership is so suspended or terminated.

      • MIR 3.10.3

        The Recognised Investment Exchange must be able and willing to cooperate, by the sharing of information and otherwise, with the Regulator, any relevant office-holder and any other authority or body having responsibility for any matter arising out of, or connected with, the default of a Member of the Recognised Investment Exchange or any designated non-Member or the default of a Recognised Clearing House or another Recognised Investment Exchange.