9.V.1.2 Interim conclusion

ESMA is largely satisfied about the MiFID II equity post-trade transparency regime for RMs and MTFs. ‘Largely’, because ESMA wants to increase post-trade transparency for ETFs by permitting less deferral opportunities. The change would align the deferral percentages of ETFs with shares and depositary receipts and in effect result in more equity post-trade transparency under MiFID II. The ESMA proposal should be viewed from a traditional debate in EU equity post-trade transparency regulation, namely between transparency and position risks. Enhanced equity post-trade transparency (for ETFs in this case) can increase price formation and liquidity, but it can also harm liquidity provision by investment firms taking temporary risk positions in ETFs. ESMA takes a compromise position in the MiFID II Review by permitting to increase the ETF deferral threshold of 60 minutes, albeit to transactions of EUR 15,000,000 (instead of the initial EUR 20,000,000).