S.L. 345.23 Art. 4Notification to the competent authority. engaging in algorithmictrading to pursue a market making strategy.

(1) A Maltese investment firm that engages in algorithmic trading in Malta or in another Member State or EEA State shall notify this to the competent authority and to the European regulatory authority of the trading venue at which the Maltese investment firm engages in algorithmic trading as a member or participant of the trading venue where this is not established in Malta.

(2) Upon receipt of a notification pursuant to sub-regulation (1), the competent authority may require the Maltese investment firm to provide, on a regular or basis, a description of the nature of ad hoc its algorithmic trading strategies, details of the trading parameters or limits to which the system is subject, the key compliance and risk controls that it has in place to ensure the conditions laid down in regulation 3 are satisfied and details of the testing of its systems.

(3) The competent authority may, at any time, request further information from the Maltese investment firm about its algorithmic trading and the systems used for that trading.

(4) The competent authority shall, on the request of a European regulatory authority of the trading venue at which the Maltese investment firm as a member or participant of the trading venue is engaged in algorithmic trading and without undue delay, communicate the information referred to in sub-regulations (2) and (3) that it receives from the Maltese investment firm that engages in algorithmic trading.

(5) The Maltese investment firm shall arrange for records to be kept in relation to the matters referred to in this regulation and shall ensure that those records be sufficient to enable the competent authority to monitor compliance with the requirements of MiFID.

(6) A Maltese investment firm that engages in a high-frequency algorithmic trading technique shall store in an approved form accurate and time sequenced records of all its placed orders, including cancellations of orders, executed orders and quotations on trading venues and shall make them available to the competent authority upon request.

trading to pursue a market making strategy shall, taking into account the liquidity, scale and nature of the specific market and the characteristics of the instrument traded:

(a) carry out this market making continuously during a specified proportion of the trading venue’s trading hours, except under exceptional circumstances, with the result of providing liquidity on a regular and predictable basis to the trading venue;

(b) enter into a binding written agreement with the trading venue which shall at least specify the obligations of the Maltese investment firm in accordance with paragraph (a) of this regulation; and

(c) have in place effective systems and controls to ensure that it fulfils its obligations under the written agreement referred to in paragraph (b) at all times.