[ESMA 70-872942901-38 MiFID II MiFIR market structures Q&A, Q&A 3.20]

There are two different obligations when an investment firm is pursuing a market making strategy in trading venues allowing or enabling algorithmic trading through their systems:

1. There is a generic obligation, not restricted to specific financial instruments, for trading venues to sign written market making agreements with all investment firms pursuing a market making strategy on their systems (Article 48(2) and Article 17(3) and (4) of MiFID II) when the circumstances described in Article 1(2) of RTS 8 are met; and
2. Trading venues must have market making schemes in place only with respect to the instruments listed in Article 5 of RTS 8.

In order for investment firms to assess whether they are posting competitive prices on a trading venue and may therefore potentially qualify as engaging into a market making strategy, and have to enter into a market making agreement, trading venues enabling or allowing algorithmic trading through their systems must make public a maximum bid-ask range for each financial instrument they made available for trading.

ESMA notes that trading venues may group financial instruments when setting the maximum bid-ask spread for these purposes.