Einde inhoudsopgave
EU Equity pre- and post-trade transparency regulation (LBF vol. 21) 2021/5.VII.3.3.1
5.VII.3.3.1 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:ADS266488:1
- Vakgebied(en)
Financieel recht / Bank- en effectenrecht
Financieel recht / Europees financieel recht
Financiële dienstverlening / Financieel toezicht
Voetnoten
Voetnoten
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. 43.
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. 96.
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. 97.
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. 97.
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. 42.
See, for example, AFME, 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, p. 33.
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. 42.
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. 42.
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. 43.
Another aspect of the ESMA MiFID II Review concerns whether or not SIs should remain an eligible venue under the MiFID II share trading-obligation. The final outcome is that ESMA does not recommend excluding SIs as eligible execution venues under the MiFID II share trading-obligation.1 The final recommendation of ESMA is the consequence of the consultation process. During the consultion process, ESMA indicated that SIs are an important source of liquidity and an efficient trading alternative reinforcing the competiveness of trading platforms in the EU.2 That being said, ESMA also stated that the EU share markets have reached an unprecedent level of maturity and that MiFID II has the aim to reduce liquidity fragmenation and to offer deeper pools of liquidity to investors. ESMA noted that SIs play a significant role in share trading (approximately 20 percent) and their number increased following the application of MiFID II.3 For these reasons, ESMA asked for stakeholder input on whether SIs should remain an eligible venue under the MiFID II share trading-obligation. ESMA added that, as an intermediate solution, the share trading obligation could be limited to RMs and MTFs for liquid shares, whereas SIs could remain an eligible venue for illiquid shares.4
A large majority of respondents to the ESMA consultation did not support removing SIs as eligible execution places for the purposes of the MiFID II share trading-obligation.5 This is not surprising. SIs cover a range of activities that are complementary to RMs and MTFs, such as SIs trading large sizes with urgency (so-called ‘immediacy’).6 Removing the alternative of SIs for EU investment firms trading in shares was therefore seen as detrimental to EU investors.7 Only a minority of respondents favoured to remove SIs as eligible execution venues for the purposes of the MiFID II share trading-obligation. The arguments included fragmentation of liquidity, impaired price formation and challenges for investment firms to deliver best execution for their clients.8 Considering the broad support to maintain SIs as possible execution places, ESMA does not recommend excluding SIs as venues under the MiFID II share trading-obligation.9