Throughout MiFID II and MiFIR, there are several provisions which refer to the ‘member or participant’ of a Trading Venue. The meaning of ‘Trading Venue’ is defined in Article 4(1)(24) of MIFID II and captures regulated markets, multilateral trading facilities (MTFs) and organised trading facilities (OTFs). However, there is a need for further clarity concerning what is meant by ‘member or participant’ of a Trading Venue for the purposes of Article 50 MiFID II and Article 25(2) MiFIR.

The terms ‘member’ and ‘participant’ are generally used in the context of regulated markets and MTFs. Recital 16 of MiFID II clarifies that ‘persons having access to regulated markets or MTFs are referred to as members or participants. Both terms may be used interchangeably…’

However, a different methodology is being used for OTFs reflecting the fact that MiFID client-facing obligations apply to OTF operators as opposed to operators of MTFs and RMs. For example, Article 18(7) of MiFID II states that MTFs and OTFs should have ‘at least three materially active members or users’ whereas Article 20 contains a prohibition against an OTF executing ‘client’ orders against the proprietary capital of the OTF. In both cases, it appears that the term ‘user’ and ‘client’ are used interchangeably when referring to an OTF and that consequently they are analogous with the terms ‘member’ or ‘participant’.