18.IV.1.2.1.4 Difference 4: increase in detail

A final striking change from the ISD to MiFID I was the amount of detail. Compared to the ISD, the MiFID I pre- and post-trade transparency regime was far more detailed (i.e. rule-based). The reason for the increase in detail was to ensure a similar application across the Member States, something in which the ISD pre- and post-trade transparency regime was not successful.1 The RM and MTF MiFID I pre-trade and post-trade transparency obligations were minimum harmonised, but extensive in detail. The same was true for the MiFID I post-trade transparency obligations for investment firms operating outside RMs and MTFs. The RM and MTF waivers to pre-trade transparency were maximum harmonised and covered far more detail compared to the ISD (although being overall principle-based in nature). The possibilities for RMs, MTFs, and investment firms operating outside RMs/MTFs for post-trade data deferral were maximum harmonised and fairly detailed. In addition, the SI pre-trade transparency regime and the client limit order rule were both maximum harmonised and detailed. CESR also provided, although formally non-binding, authoritative clarification for MiFID I pre- and post-trade transparency rules. The MiFID I pre- and post-trade transparency regime was not entirely rule-based (e.g. the RM and MTF pre-trade transparency waivers were principle-based). The aim here was to leave room for innovation.2

After the implementation of MiFID I controversy arose on several matters. The main issues were (1) the scope of the pre- and post-trade transparency regime, (2) pre-trade transparency waivers for RMs and MTFs, (3) pre-trade transparency rules for investment firms outside RMs and MTFs, including SIs, and (4) post-trade transparency rules for RMs, MTFs, and investment firms operating outside such venues.