ERDEM-NEWSLETTER-2018-metin

200 NEWSLETTER 2018 trading code so the person can electronically transmit orders relating to a financial instrument directly to the trading venue, and includes ar- rangements that involve the use by a person of the infrastructure of the member or participant or client, or any connecting system provided by the member or participant or client, to transmit the orders (direct market access) and arrangements where such an infrastructure is not used by a person (sponsored access). Following an applicable equivalence decision, third-country firms can offer DEA services to access trading venues within the EU by complying with the laws of the respective member state. But MiFID II mandates the investment firm providing DEA to monitor the client closely, ban the provision of DEA to markets for their clients where such access is not subject to proper systems and controls. Irrespective of the form of the DEA provided, firms providing such access should assess and review the suitability of clients using that service and en- sure that risk controls are imposed on the use of the service, and that those firms retain responsibility for trading submitted by their clients through the use of their systems, or using their trading codes. Market Transparency Order Record Keeping and Transaction Reporting Requirement MiFID II broadens the scope of transaction reporting and cov- ers all financial instruments, such as depositary receipts, exchange traded funds, certificates, bonds, structured finance products, emis- sion allowances, derivatives and package orders. Moreover, financial instruments traded on OTFs are also covered. Plus, transactions do not need to have been executed on an EU trading venue for the reporting requirement to exist. Financial instruments where the underlying is a financial instrument that is traded on an EU trading venue shall have to be reported, as well. Investment firms should also keep records of all their orders and all their transactions in financial instruments, and operators of platforms are required to keep records of all orders submitted to their systems. The ESMA should coordinate the exchange of information