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---
title: "ESMA Q&A 1495 — Q&A — Multilateral and bilateral systems - Member [Answer Published]"
shortTitle: "ESMA Q&A 1495 — Q&A — Multilateral and bilateral systems - Member [Answer Published]"
answer_id: ESMA_QA_1495
topic: "Multilateral and bilateral systems"
status: "Answer Published"
type: qa
instrument_type: qa
authority: ESMA
binding: false
binding_character: non_binding
legal_status: in_force
regulation: "MiFIR"
mifir_level3: true
mica_level2: false
legal_basis: "MiFIR"
date: 5 December 2019
source_link: https://www.esma.europa.eu/publications-data/questions-answers/1495
lifecycle: "Answer Published"
text_version: "ESMA Q&A register, 5 December 2019"
source_url: "https://www.esma.europa.eu/publications-data/questions-answers/1495"
check_status: matched
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last_checked: 2026-10-26
checked_against: "the ESMA publication"
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document_type: "qa_answer"
legal_nature: "not_legislation"
addressees: "not stated in the document"
dates:
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lifecycle_label: "Answer Published"
---

**Answer by ESMA, published in its Q&A tool · not legislation · published 5 Dec 2019 [Answer Published]**

*Answer Published · ESMA Q&A register, 5 December 2019 · Checked against the ESMA publication on 26 Oct 2026 · [Official source](https://www.esma.europa.eu/publications-data/questions-answers/1495)*

| | |
|---|---|
| **Full title** | ESMA Q&A 1495 — Q&A — Multilateral and bilateral systems - Member \[Answer Published\] |
| **Prepared by** | ESMA |
| **Published by** | ESMA, in the ESMA Q&A tool |
| **Reference** | ESMA_QA_1495 |
| **Document type** | Q&A |
| **Legal nature** | Not legislation |
| **Addressees** | Not stated in the document |
| **Dates** | Published 5 December 2019; question submitted 5 December 2019 |
| **Legal basis** | MiFIR |
| **Related instruments** | None recorded |
| **Text on this page** | Word for word — the full text of the ESMA publication |

**Multilateral and bilateral systems - Member preferencing functionalities and pre-arranged transactions**

### Question

Can member preferencing functionalities be used to formalise pre-arranged transactions?

***

### Answer

\[ESMA 70-872942901-38 MiFID II MiFIR market structures Q&A, Q&A 5.9a\]

MiFID II requires trading venues to use transparent rules and procedures providing for fair and orderly trading and to establish objective criteria for the efficient execution of orders (Articles 19(1) and 47(1)(d) of MiFID II). ESMA considers that trading venues may implement/offer member preferencing functionalities in the trading system they operate as long as those functionalities comply with the MiFID II requirements and in particular are transparent and available to all members or participants.

However, ESMA also considers that member preferencing functionalities cannot be used to formalise pre-arranged transactions. Trading venues should monitor the use of member preferencing on any type of trading system and establish arrangements and procedures to detect attempts to use member preferencing functionalities to formalise privately negotiated trades. Should trading venues detect such use of member preferencing functionalities, they should have appropriate means in place to ensure that those trading patterns are discontinued.

ESMA reminds market participants that pre-arranged transactions may only be formalised on a trading venue when that trading venue benefits from an appropriate pre-trade transparency waiver.

***

**Source:** [ESMA original document](https://www.esma.europa.eu/publications-data/questions-answers/1495)