9.III.2.3 Background

The deferral regime for investment firms trading outside an RM or MTF is largely a legacy from MiFID I. Under MiFID I an investment firm trading outside an RM or MTF could defer publication in relation to (a) shares admitted to trading on an RM for which (b) an RM was authorised in using a deferred publication arrangement in relation to the share in question.1 The EU deemed it important that the conditions for deferral were equal for RMs, MTF, and investment firms operating outside RMs/MTFs.2

A similar position is in place under MiFID II, albeit with some changes. Under MiFID II investment firms trading outside an RM or MTF can defer equity post-trade publication for (1) equity instruments traded on a trading venue (instead of shares admitted to trading on an RM) for which (2) an RM or MTF (instead of merely RMs) has authorised deferred publication arrangements in place.3MiFID II also clarifies the applicable NCA for the investment firm trading outside an RM or MTF (see paragraph above).4 The changes reflect broader changes from MiFID I to MiFID II, that is – an expansion in financial instruments for the post-trade transparency regime (from shares to equity(-like)); the possibility that equity instruments are only traded on an MTF; and the aim to enhance legal clarity. Similar to MiFID I, the MiFID II deferral provisions still enable NCAs to permit the investment firm trading outside an RM/MTF not to require deferral authorisation from the NCA. MiFID II permits NCAs to do so, since an RM or MTF will already be authorised to provide deferred publication for the equity instrument in question.5