5.V.2 Exceptions to the share trading-obligation

The MiFID II share trading-obligation is not absolute. MiFID II covers two exceptions. Exceptions are where share trades have characteristics that are: (1) non-systematic, ad-hoc, irregular and infrequent; or (2) carried out between eligible and/or professional counterparties and do not contribute to the price discovery process.1 If one of the exceptions applies, the investment is not required to concentrate (route and execute) the share transaction on an RM, MTF, SI, or equivalent third country trading venue. This means that the MiFID II equity pre-trade transparency obligations for RMs, MTFs, or SIs do not necessarily apply for exempted share transactions. The same is true for the equity pre-trade transparency obligations of the equivalent third country trading venue. Where one of the exceptions to the MiFID II share trading obligation is available, MiFID II or equivalent equity pre-trade transparency obligations only apply where the investment firm chooses (not: is required) to execute the exempted share transaction in the system of an RM, MTF, SI, respectively equivalent third country trading venue.