Updated 15/01/2025
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MiFID II ToolDelegated Regulation 2017/578
Article 3

Article 3 - Exceptional circumstances

Article 3

Exceptional circumstances

The obligation for investment firms to provide liquidity on a regular and predictable basis laid down in Article 17(3)(a) of Directive 2014/65/EU shall not apply in any of the following exceptional circumstances:

(a)

a situation of extreme volatility triggering volatility mechanisms for the majority of financial instruments or underlyings of financial instruments traded on a trading segment within the trading venue in relation to which the obligation to sign a market making agreement applies;

(b)

war, industrial action, civil unrest or cyber sabotage;

(c)

disorderly trading conditions where the maintenance of fair, orderly and transparent execution of trades is compromised, and evidence of any of the following is provided:

(i)

the performance of the trading venue's system being significantly affected by delays and interruptions;

(ii)

multiple erroneous orders or transactions;

(iii)

the capacity of a trading venue to provide services becoming insufficient;

(d)

where the investment firm's ability to maintain prudent risk management practices is prevented by any of the following:

(i)

technological issues, including problems with a data feed or other system that is essential to carry out a market making strategy;

(ii)

risk management issues in relation to regulatory capital, margining and access to clearing,

(iii)

the inability to hedge a position due to a short selling ban;

(e)

for non-equity instruments, during the suspension period referred to in Article 9(4) of Regulation (EU) No 600/2014 of the European Parliament and of the Council (3).

(3)  Regulation (EU) No 600/2014 of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Regulation (EU) No 648/2012 (OJ L 173, 12.6.2014, p. 84).