5.II.1.6.3 Actionable indications of interest

Indications of interest (IOIs) enable investors to send and receive trading interest information without being required to send orders to obtain such pre-trade information. A main benefit of IOIs is its reduction of cost.1 A downside is that IOIs can result in unequal access to pre-trade information, since one investor will receive the IOI, whereas the broader investing public will not.2

CESR noted during the MiFID I-review that it was unclear where IOIs stood within the MiFID I pre-trade transparency regime.3 A large majority of respondents to CESR’s consultation indicated that ‘actionable’ IOIs, that is - IOIs containing all necessary elements to agree on a trade, such as side, size, and price, sent from an RM/MTF needed to be subject to pre-trade transparency rules.4

The Commission took a similar view. With the aim to ensure equal access to pre-trade information the Commission noted that extending the pre-trade transparency rules to actionable IOIs could prevent a group of market participant to obtain pre-trade data information, while excluding others.5 The latter is apparent in the final MiFID II text. In contrast to the previous regime (MiFID I), MiFID II makes explicit that the equity pre-trade transparency obligations for RMs and MTFs apply to actionable IOIs.6