24 May 2023

ESMA: Final Report on market outages

The opinion sets out ESMA’s expectations on how National Competent Authorities (NCA) should ensure that trading venues have appropriate communication protocols in place, which arrangements should be in place to avoid an outage affecting the closing auction and how trading venues should ensure the market is provided with an official closing price.

This final report presents ESMA’s opinion on market outages following the feedback received by stakeholders to the CP. The opinion sets out ESMA’s expectations on how National Competent Authorities (NCA) should ensure that trading venues have appropriate communication protocols in place, which arrangements should be in place to avoid an outage affecting the closing auction and how trading venues should ensure the market is provided with an official closing price.

Section 2 and 3 provide a brief introduction and set out the legal background. Section 4 highlights the importance for trading venues to have an appropriate outage plan, setting out ESMA’s expectations on how NCAs should require trading venues to communicate appropriately with their members and participants (and the public) and which steps should be taken to reopen trading in an orderly fashion.
Section 5 and 6 explore how trading venues should deal with the case of an outage affecting the closing auction and whether the lack of a reference price can be considered an issue in the context of an outage.
Finally, section 7 provides considerations on non-equity instruments, in particular derivatives markets.
The final ESMA opinion is provided in the Annex to this final report.

Next Steps
This opinion provides guidance on the requirements that NCAs should require trading venues to have in place to deal with market outages events. ESMA expects that, considering the guidance provided in this opinion, NCAs should ensure that trading venues have in place an appropriate outage plan ready to be deployed in case of an outage.

ESMA

© ESMA