EU Equity pre- and post-trade transparency regulation (LBF vol. 21) 2021/9.III.1.5:9.III.1.5 Responsibility for publication

EU Equity pre- and post-trade transparency regulation (LBF vol. 21) 2021/9.III.1.5

9.III.1.5 Responsibility for publication

Documentgegevens:

mr. J.E.C. Gulyás, datum 01-02-2021

Datum: 01-02-2021
Auteur: mr. J.E.C. Gulyás
JCDI: JCDI:ADS266422:1
Vakgebied(en): Financieel recht / Bank- en effectenrecht
Financieel recht / Europees financieel recht
Financiële dienstverlening / Financieel toezicht

The MiFID II requirement for investment firms operating outside an RM or MTF to publish through an APA should be distinguished from the responsibility for post-trade data publication. Similar to MiFID I, MiFID II makes clear that the investment firms operating outside RMs and MTFs is responsible for making the post-trade data public (albeit through an APA under MiFID II). MiFID II does not deem such a provision indicating responsibility necessary for RMs and MTFs (see section II above).1 This seems logical, because confusion about the responsibility for equity post-trade data publication will in particular arise in the context of investment firms operating outside RMs and MTFs:

MiFID II covers rules that explain which investment firm operating outside an RM or MTF is responsible for making the equity post-trade data public (through an APA). MiFID II removes the MiFID I possibility for investment firms to enter into an agreement with respect to the responsibility for equity post-trade data publication. Instead, a MiFIR Delegated Regulation sets out which investment firm needs to make the equity post-trade data public. The aim here is to prevent duplication of equity post-trade reports.2 The general obligation is that the selling investment firm makes the transaction public through an APA (unless the counterparty is no investment firm).3 An exception is in place for the situation where only one of the investment firms party to the transaction is a SI in the given equity instrument and the SI is the buying firm. In this situation, the SI needs to make the transaction public through an APA, whilst also informing the seller of the action taken.4

Similar to MiFID I, MiFID II requires investment firms to take all reasonable steps to ensure the transaction is made public as a single transaction. For that purpose, MiFID II notes that two matching trades entered at the same time and for the same price with a single party interposed (back-to-back trading) shall be considered to be a single transaction.5 This means that so-called matched principal trades are considered to be one transaction.6

Toon alle voetnoten

Voetnoten

Voetnoten

Art. 6-7 MiFIR.

Recital 15 MiFIR Delegated Regulation 2017/587.

Art. 12(4) MiFIR Delegated Regulation 2017/587.

Art. 12(5) MiFIR Delegated Regulation 2017/587. Where a trade is concluded between two SIs (which is somewhat theoretical), the general obligation applies, that is – the selling investment firm (SI) needs to publish the trade through an APA (ibid).

Art. 12(6) MiFIR Delegated Regulation 2017/587. A similar provision was in place under MiFID I (Art. 27(4) MiFID I Implementing Regulation).

‘Matched principal trading’ means a transaction where the facilitator interposes itself between the buyer and the seller to a transaction in such a way that it is never exposed to market risk throughout the execution of the transaction, with both sides executed simultaneously, and where the transaction is concluded at a price where the facilitator makes no profit or loss, other than a previously disclosed commission, fee or charge for the transaction (art. 4(1)(38) MiFID II Directive). ESMA clarifies the obligation to report to an APA in relation to matched principal trading through formally non-binding guidance. ESMA notes that the party that interposes its own account (facilitator of the matched principal trade) should not report the trade, except if the seller is not an investment firm (ESMA, Q&A on MiFID II and MiFIR transparency topics, 8 July 2020(ESMA70-872942901-35), Answer 3).