During the FIX EMEA Trading regulatory panel, the Dutch AFM representative said resolving the ongoing trading venues perimeter debate is a priority for 2026.
European regulators look set to take a harder line on firms operating multilateral trading systems without a trading venue licence.
Speaking at the FIX EMEA Trading conference, Martijn Rookhuijzen, senior supervisor at the Dutch authority for the financial markets (AFM), said: “It is a priority for the AFM in 2026 to address the issue of firms operating multilateral systems without the proper trading venue license. ESMA clarified the scope of the licensing requirements more than three years ago. We consider this sufficient time for the market to adapt, yet we still observe multilateral activity on unlicensed systems. This places licensed trading venues at an unfair disadvantage and results in reduced oversight of trading activities.”
For years, market participants have debated where the line sits between workflow tools and venue activity, especially in fixed income where request for quote (RFQ) systems, dealer networks, execution management systems (EMSs) and negotiated execution models can easily creep into what should be under a trading venue license perimeter.
Read more: Is your EMS still an EMS according to ESMA?
ESMA said in its 2023 clarification note that firms bringing together multiple third-party trading interests in a multilateral way may require authorisation as a regulated market, multilateral trading facility (MTF) or organised trading facility (OTF). The AFM is now making clear that supervisors believe the market has had enough time to adapt.
While licensed venues operate public deterministic protocols defined by formal rulebooks, regulatory surveillance requirements and transparency obligations, ESMA explained that systems that produce similar multilateral outcomes without a license create a supervisory blind spot and have an unfair cost advantage.
Market participants explained on background to The Desk that the issue is particularly sensitive where technology can aggregate or organise multiple trading interests inside non-venue workflows, while still delivering an execution outcome that looks venue-like in all but name.
Some market participant reported that, as unlicensed market venues are not bound by deterministic data dissemination protocols, they might purposely or inadvertently create asymmetric trading edges for some participants versus others: One trader could benefit from a tailored EMS providing a better view of what’s being traded across multilateral venues when others don’t.
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