18.IV.1.2.2 MiFID I Review: scope

Divergence was apparent across the Member States concerning the applicability of the MiFID I transparency regime besides shares. Some Member States applied the Member State option, whereas others did not.1 In addition, Member States had different understandings of certain financial instruments (e.g. some Member States considered ‘certificates’ to be shares, whereas other Member States did not).2 The result was a different application of the MiFID I rules across the EU. The EU wanted to change the situation and provide more legal certainty under MiFID II. Given the similarities of ‘equity-like’ instruments (e.g. depositary receipts, ETFs, certificates) to shares, the EU wanted to expand the MiFID I transparency regime, among other things, to equity-like instruments.3 In addition, the EU observed that, since the transparency rules only applied to shares admitted to trading on an RM, shares only admitted on MTFs fell outside the scope.4 In effect, the EU wanted to expand the MiFID I transparency rules under MiFID II to equity instruments (including ‘equity-like’) traded on an RM or MTF.

The foregoing examples indicate that the MiFID I regime, according to the final EU opinion, required more harmonisation. Although shares traded solely on MTFs (i.e. admitted to trading on an MTF, without admission to trading on an RM) were a relatively new phenomenon, the same was not true for the limited scope of MiFID I in terms of shares. Already under the ISD transparency rules applied to a broad range of financial instruments (including shares, depositary receipts, bonds, and so forth), both under national law and ISD rules. The EU wanted to return to the ISD situation, albeit in the form of far more harmonised (equity) pre- and post-trade transparency rules.