5.II.1.6.9 Maximum harmonised obligations

MiFID II provides more harmonisation compared to MiFID I. Whereas under MiFID I the general equity pre-trade transparency rules for RMs and MTFs were laid down in the MiFID I Directive, MiFID II uses the directly applicable framework regulation (MiFIR). In addition, the MiFID I Directive used the terms ‘at least’, indicating minimum harmonisation. MiFID II removes these terms in the context of the equity pre-trade transparency obligations for RMs and MTFs, which means that in principle Member States can no longer lay down stricter or more lenient equity pre-trade transparency obligations. ‘In principle’, since MiFID II still refers to the publication ‘for at least’ the five best bid and offer price levels in the context of continuous auction order book-trading systems (similar to MiFID I).1

The overall MiFID II approach for maximum harmonisation reflects a broader trend towards maximum harmonisation in European financial law after the financial crisis. In line with this trend, the Commission proposed the MiFID II-regime to consist out of a framework directive (MiFID II) and framework regulation (MiFIR), as supplemented by delegated regulations (level 2 measures). The Commission argued that a regulation was required to prevent any deviation on the national level and market distortions and regulatory arbitrage, preventing the development of a level playing field.2 The Commission wanted to remove the remaining obstacles to trade and significant distortions of competition arising from divergences between national laws.3 The Commission proposed to introduce a framework regulation (MiFIR) to establish uniform and directly applicable requirements. The Commission viewed the introduction of MiFIR as necessary for the even functioning of the market in financial instruments in several fields. This included, among other things, the publication of data.4 In line with the foregoing, the Commission’s MiFIR proposal included mainly maximum harmonized equity pre-trade transparency obligations.5 No Member State options for equity pre-trade transparency publication were proposed.6

The European Parliament and Council had a similar view.7 The latter is evident in the final MiFID II framework. The equity pre-trade transparency obligations for RMs and MTFs are laid down in a directly applicable regulation (MiFIR). The equity pre-trade transparency obligations are maximum harmonized.8