Financial Markets Act (Cap. 345), article 4F

4F. (1) A regulated market shall establish and maintain its operational resilience in accordance with the requirements laid down in Chapter II of the DORA Regula tion to ensure its trading syst ems are resilient, have sufficient capacity to deal with peak order and message volumes, are able to ensure orderly trading under conditions of severe market stress, are fully tested to ensure such conditions are m et and are subject to effective business continuity arrangements, includin g ICT business continuity policy and pl ans and ICT response and recov ery plans established in accordance with Article 11 of the DORA Regulation, to ensure continuity of its services if there is an y failure of its trading systems. (2) A regulated market shall have in place: (a) written agreements with all investment firms pursuing a market making strategy on the regulated market; (b) schemes to ensure that a sufficient number of investment firms participate in such agreements which require them to post firm qu otes at competitive prices with the result of providing liquidity to the market on a regular and predictable basis, where such a requirement is appropriate to the nature and scale of the trading on that regulated market. (3) The written agreement referr ed to in sub-article (2) shall at least specify: (a) the obligations of the investment firm in relation to the provision of liquidity and where applicable any other obligation arising from par ticipation in the scheme referred to in sub-article (2)( b); (b) any incentives in terms of rebates or otherwise offered by the regulated market to an investment firm so as to provide liquidity to the market on a regular and predictable basis and, where applicable, any other rights accruing to the investment firm as a result of participation in the scheme referred to in sub-article (2)(b). (4) A regulated market shall monitor and enforce compliance by investment firms with the requirements of such binding writt en agreements. The regulated market shall inform the competent authority about the content of the binding written agreement an d shall, upon request, provide all further information to the competent authority necessary to enable the competent authority to satisfy itself of compliance by the regulated market with sub-a rticle (3) and this sub-article. (5) A regulated market shall have in place effective systems, procedures and arrangements to reject orders that exceed pre- determined volume and price thre sholds or are clearly erroneous . (6) A regulated market may temporarily halt or constrain trading in emergency situations or in the event of a significan t price 20 CAP. 345.] FINANCIAL MARKETS movement in a financial instrument on such market or a related market during a short period and, in exceptional cases, it may cancel, vary or correct any transaction: Provided that such regulated market shall ensure that the parameters for halting or constr aining trading are appropriatel y calibrated in a way which takes into account the liquidity of d ifferent asset classes and sub-classes, the nature of the market model a nd the types of users and is sufficient to avoid significant disruptio ns to the orderliness of trading. (7) A regulated market shall re port the parameters for halting trading and any material chang es to those parameters to the competent authority in a consistent and comparable manner. The competent authority shall in turn report them to ESMA . (8) Where a regulated market which is material in terms of liquidity in that financial instrument halts trading, in any Me mber State or EEA State including Malta, that trading venue shall ha ve the necessary systems and procedures in place to ensure that it will notify the competent authority or European regulatory authoriti es, as the case may be, in order for them to coordinate a market-wi de response and determine whether it is appropriate to halt tradin g on other venues on which the financial instrument is traded until trading resumes on the original market. (8a) A regulated market shall disclose publicly on its website information about the circumstances leading to the halting or constraining of trading and the principles for establishing the main technical parameter s used to do so. Cap. 370. (8b) Where a regulated market does not halt or constrain tradin g as referred to in sub-article (6), despite the fact that a signifi cant price movement in a financial instrument or related financial instrum ents has led to disorderly trading conditions on one or more markets , the Authority may take appropriate measures to re-establish the nor mal functioning of the markets, including giving such directives as referred to in paragraphs (h) to (k) of article 15(2) of the Investment Services Act. ( 9 ) A r e g u l a t e d m a r k e t s h a l l h a v e i n p l a c e e f f e c t i v e systems, procedures and arrangements, including: (a) such systems that require members or participants to carry out appropriate testing of algorithms and providing environments to facilitate such testing in accordance with the requirements laid down in Chapters II and IV of the DORA Regulation, in order to: (i) ensure that algorithmic trading systems cannot create or contribute to disorderly trading conditions on the market; and (ii) manage any disorderly trading conditions which do arise from such algorithmic trading systems; FINANCIAL MARKETS [CAP. 345. 21 and (b) systems to limit the ratio of unexecuted orders to transactions that may be entered into the system by a member or participant, in order to: (i) be able to slow down the flow of orders if there is a risk of its system capacity being reached; and (ii) limit and enforce the minimum tick size that may be executed on the market. (10) A regulated market that p ermits direct electronic access shall have in place effective sy stems procedures and arrangemen ts to ensure that members or par ticipants are only permitted to provide such services if they are investment firms authorised u nder MiFID or credit institutions authorised under the CRD , that appropriate criteria are set and applied regarding the suitabil ity of persons to whom such access may be provided and that the member or participant retains responsibility for orders and trades exe cuted using that service in relation to the requirements of MiFID . (11) A regulated market shall also set appropriate standards regarding risk controls and thresholds on trading through such access and be able to distinguish and, if necessary, stop order s or trading by a person using direct electronic access separately f rom other orders or trading by the member or participant. (12) A regulated market shall have arrangements in place to suspend or terminate the provision of direct electronic access by a member or participant to a client in the case of non-compliance with sub-articles (10) and (11). (13) A regulated market shall ensure that its rules on co- location services are transparent, fair and non-discriminatory. (14) A regulated market shall ensure that its fee structures including execution fees, ancillary fees and any rebates are transparent, fair and non-discriminatory and that they do not create incentives to place, modify or cancel orders or to execute transactions in a way which contributes to disorderly trading conditions or market abuse. In particular, a regulated market shall impose market making obligations in individual shares or a suit able basket of shares in ex change for any rebates that are granted. (15) A regulated market shall be allowed to adjust its fees fo r cancelled orders according to the length of time for which the order was maintained and to calibrate the fees to each financial instrument to which they apply. (16) A regulated market may be allowed to impose a higher fee for placing an order that is subsequently cancelled than an ord er which is executed and to impose a higher fee on participants placing a high ratio of cancelled orders to executed orders and on those operating a high-frequency algorithmic trading technique in order to reflect the additiona l burden on system capacity. 22 CAP. 345.] FINANCIAL MARKETS (17) A regulated market shall be able to identify, by means of flagging from members or participants, orders generated by algorithmic trading, the different algorithms used for the crea tion of orders and the relevant perso ns initiating those orders. Tha t information shall be available to the competent authority and European regulatory au thorities upon request. (18) Upon request by the competent authority, a regulated market shall make available ther eto, data relating to the order book or give the competent authority access to the order book so tha t it is able to monitor trading. Tick sizes. Added by: XXXI. 2017.21. Amended by: XXIX.2025.10. 4G . (1) Regulated markets shall adopt tick size regimes in shares, depositary receipts, excha nge-traded funds, certificate s and other similar financial instruments and in any other financial instrument for which regulatory technical standards are develop ed by ESMA: Provided that the application of tick sizes shall not prevent regulated markets from matching o rders large in scale at mid-po int within the current bid and offer prices. (2) The tick size regimes referred to in sub-article (1) shall: (a) be calibrated to reflect the liquidity profile of the financial instrument in different markets and the average bid-ask spread, taking into account the desirability of enabling reasonably stable prices without unduly constraining further narrowing of spreads; (b) adapt the tick size for each financial instrument appropriately. (3) In respect of shares with an International Securities Identification Number (ISIN) is sued outside the European Econom ic Area (EEA), or shares which have an EEA ISIN and which are trad ed on a third-country venue in the local currency or in a non-EEA currency, as referred to in point (a) of Article 23(1) of MiFIR for which the venue that is the most relevant market in terms of li quidity is in a third country, regulated markets may provide for the same tick size that applies in that venue. Synchronisation of business clocks. Added by: XXXI. 2017.21.