Einde inhoudsopgave
EU Equity pre- and post-trade transparency regulation (LBF vol. 21) 2021/9.V.1.1
9.V.1.1 ESMA key proposals and observations
mr. J.E.C. Gulyás, datum 01-02-2021
- Datum
01-02-2021
- Auteur
mr. J.E.C. Gulyás
- JCDI
JCDI:ADS267074:1
- Vakgebied(en)
Financieel recht / Bank- en effectenrecht
Financieel recht / Europees financieel recht
Financiële dienstverlening / Financieel toezicht
Voetnoten
Voetnoten
ESMA, Consultation Paper: MiFID II/MiFIR review report on the transparency regime for equity and equity-like instruments, the double volume cap mechanism and the trading obligations for shares 4 February 2020 (ESMA70-156-2188), p. 85.
ESMA, MiFID II/MiFIR Review Report: on the transparency regime for equity and equity-like instruments, the double volume cap mechanism and the trading obligations for shares, 16 July 2020(ESMA70-156-2682), p. 32.
ESMA, MiFID II/MiFIR Review Report: on the transparency regime for equity and equity-like instruments, the double volume cap mechanism and the trading obligations for shares, 16 July 2020(ESMA70-156-2682), p. 31-32.
ESMA, MiFID II/MiFIR Review Report: on the transparency regime for equity and equity-like instruments, the double volume cap mechanism and the trading obligations for shares, 16 July 2020(ESMA70-156-2682), p. 31.
ESMA, MiFID II/MiFIR Review Report: on the transparency regime for equity and equity-like instruments, the double volume cap mechanism and the trading obligations for shares, 16 July 2020(ESMA70-156-2682), p. 19 and p. 23-24.
As examined in section II above, MiFID II enables NCAs to authorise RMs and MTFs in deferring equity post-trade data publication, provided the MiFID II conditions are met.1 In the MiFID II Review, ESMA observes a higher percentage in volume of RM/MTF transactions benefitting from a deferral compared to the number of transactions, indicating that only a small portion of large trades benefit from deferred publication. As a consequence, ESMA believes that in general the MiFID II deferral regime has delivered on its objectives, namely to protect large trades while maintaining a high level of real-time post-trade transparency.2 ‘In general’, because ESMA sees merit in revisiting the MiFID II deferral thresholds for ETFs. To change the situation, ESMA proposes the following:
Increase the post-trade large in scale-threshold for ETFs benefitting from a 60-minute delay from transactions of EUR 10,000,000 to transactions of EUR 15,000,000; and
ESMA proposes to keep the MiFID II conditions for deferral of post-trade data publication of shares and depositary receipts the same.3
The ESMA recommendations mean that ESMA wants a stricter equity post-trade transparency approach for ETFs (i.e. less opportunities for deferral). The ESMA recommendation for ETFs is a compromise. ESMA proposed in the consultation paper to raise the ETF deferral-threshold of 60 minutes to transactions of EUR 20,000,000. A majority of respondents to the consultation disagreed with ESMA. A main concern raised was that increasing the qualifying size will likely lead to reduced liquidity. By contrast, other respondents supported ESMA’s proposal. These respondents believed that aligning ETFs with shares and depositary receipts will help to increase the timely availability of ETF post-trade data and also should be helpful in the future as when a CTP is delivered.4 ESMA takes a middle-way between both positions by proposing a stricter ETF deferral regime, whilst lowering the initial threshold to EUR 15,000,000.
Respondents to the ESMA consultation largely agreed with ESMA in keeping the MiFID II conditions for deferral of post-trade data publication for shares and depositary receipts the same. These respondents agreed with ESMA that the MiFID II (MiFIR) deferral regime has delivered on its objectives in the area of shares and depositary receipts.5 ESMA has not provided recommendations on the deferral regime for certificates. The reason here is the low activity in certificate trading under MiFID II. ESMA recommends to retain certificates as a category under the MiFID II regime, but to increase legal clarity about the definition.6 For a detailed examination, reference is made to chapter 5(section VII).