18.IV.1.3.1 General

MiFID II wants to increase the amount of transparency in the financial markets compared to MiFID I.1MiFID II does so by restricting competition, albeit in a less rigid form than the ISD. MiFID II permits competition among trading venues, but also (1) covers a share trading-obligation and (2) restricts so-called broker crossing networks (e.g. through a stricter SI definition).2 The objective here is to ensure sufficient trading takes place on regulated venues. Regulated venues are characterised by a high degree of equity pre- and post-trade transparency.3

Related are the new and stricter MiFID II equity pre- and post-trade transparency rules. MiFID II tightens several of the MiFID I pre- and post-trade transparency rules, meaning that more and faster pre- and post-trade data needs to be published. MiFID II also covers an equity pre- and post-trade transparency regime for a broader range of financial instruments, being shares, depositary receipts, ETFs, certificates and other similar financial instruments traded on an RM or MTF (instead of ‘shares admitted to trading on an RM’, as was the case under MiFID I). Part of the MiFID II strategy are also maximum harmonised and (more) rule-based equity pre- and post-trade transparency rules. The aim here is to ensure a common understanding across the EU. The general MiFID II equity pre- and post-trade transparency rules are laid down in a directly applicable regulation (MiFIR), which is supplemented by a great amount of delegated regulations.4

All in all, the EU strategy apparent in MiFID II relies on two pillars. The EU wants a competitive market setting (pillar 1), albeit in a restricted manner to ensure sufficient transparency (pillar 2). The two pillars are part of the broader EU strategy to achieve an integrated European financial market.