EU Equity pre- and post-trade transparency regulation (LBF vol. 21) 2021/8.III.2.2:8.III.2.2 Length and conditions

EU Equity pre- and post-trade transparency regulation (LBF vol. 21) 2021/8.III.2.2

8.III.2.2 Length and conditions

Documentgegevens:

mr. J.E.C. Gulyás, datum 01-02-2021

Datum: 01-02-2021
Auteur: mr. J.E.C. Gulyás
JCDI: JCDI:ADS266782:1
Vakgebied(en): Financieel recht / Bank- en effectenrecht
Financieel recht / Europees financieel recht
Financiële dienstverlening / Financieel toezicht

The MiFID I length and conditions for deferral with respect to investment firms operating outside RMs and MTFs were overall the same as for investment firms trading on RMs and MTFs.1 ‘Overall the same’, since a difference was the deferral process. Where NCAs authorized deferral arrangements for (a) an RM in (b) the respective share admitted to trading on an RM, the possibility for deferral also applied to transactions in those shares when undertaken by an investment firm operating outside an RM or MTF.2 The MiFID I provision did not refer to MTFs that had authorized deferral arrangements.3 This was in my view unintentionally, since RMs and MTFs represented (and still do represent under MiFID II) the same organised trading functionality.4 For this reason, it would not be logical to exclude the deferral arrangements of MTFs.5

Another unclarity was the situation where (a) an investment firm operating outside an RM/MTF (b) wanted to request deferral from the NCA where (c) the RM (or MTF) had not requested deferral for the share in question. MiFID I covered no provisions for this situation. It is my understanding that the investment firm could in this situation still use the deferral arrangement, as long as it has permission from the NCA. A different reading would harm the level playing field and could damage innovation with respect to deferral arrangements.6

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Art. 45(2), art. 30(2) and art. 28(2) MiFID I Directive. For an examination of the MiFID I equity deferral regime for RMs and MTFs, including the background of the provisions, reference is made to section II above.

Art. 28(2) MiFID I Directive.

Recital 6 MiFID I Directive and recital 7 MiFIR. See also MiFIR noting that where an MTF (a trading venue) has authorized deferral arrangements, that possibility should also apply to investment firms operating outside RMs and MTFs (art. 20(2) MiFIR).

Reference is also made to MiFID II that does state explicitly that where ‘trading venues’ (i.e. RMs and MTFs) have authorised equity deferral arrangements these can be used by investment firms operating outside RMs and MTFs (art. 20(1) and art. 7 MiFIR).

Reference is also made to the situation in the Netherlands under MiFID II. The Netherlands Authority for the Financial Markets(AFM) permits investment firms operating outside RMs and MTFs to use deferral arrangements where there is no RM or MTF authorized to use such a deferral arrangement. The AFM requires the investment firm to request authorization from the AFM before using the deferral arrangement. See: http://www.digitaal.loket.afm.nl/NL-NL/DIENSTEN/BELEGGINGSONDERNEMINGEN/Pages/aanvraag-deferrals.aspx.