9.II.1.5.2 Equity-like instruments traded on a trading venue

Under MiFID I the post-trade transparency rules only applied to shares. Member States were permitted to expand the MiFID I transparency rules to other financial instruments than shares. As a result, some Member States applied transparency obligations to other financial instruments, such as depositary receipts, ETFs, and certificates, whereas others did not.1 CESR noted that, from an economic point of view, many of these instruments were equivalent to shares. CESR therefore recommended the Commission to apply the MiFID II transparency regime to equity-like financial instruments. CESR deemed equity-like instruments to be depositary receipts, ETFs, and certificates.2

The Commission adopted CESR’s recommendations in the MiFIR Proposal.3 The Commission complemented CESR’s recommendations by adding that the equity (pre- and) post-trade transparency regime under MiFID II would also need to apply to equity instruments traded on an MTF. Under MiFID I the transparency obligations only applied to shares admitted to trading on an RM. The Commission argued that, without changing the scope, the (MiFID II) transparency rules would leave a potential difference in the level of transparency for instruments only admitted to trading on an MTF.4 The Commission also proposed the equity post-trade transparency rules to apply to equity and equity-like instruments traded on an RM or MTF. The result would be that under MiFID II equity post-trade transparency rules would apply to: (a) equity and equity-like instruments admitted to trading on an RM (for which a prospectus is mandatory), (b) equity and equity-like instruments traded on an MTF (e.g. a small cap company listed on the small cap MTF) (an EU prospectus can also be mandatory), and (c) equity and equity-like instruments traded on an RM (e.g. US blue chip company listed on a US exchange but also traded on an EU RM).5

The position of the European Parliament reflected a similar view as the Commission. The European Parliament suggested the equity post-trade transparency regime to apply to equity instruments traded on an RM or which are traded on an MTF.6 The Council shared the view of the European Parliament (and in effect of the Commission).7 This is apparent in the final MiFIR text. MiFIR subjects RMs and MTFs to an equity post-trade transparency regime that applies to shares, depositary receipts, ETFs, certificates and other similar financial instruments (relabeled as ‘equity’ under MiFID II). The MiFIR equity post-trade transparency requirements only apply where the equity instrument is traded on the RM or MTF, instead of equity instruments only admitted to trading on an RM.8