EU Equity pre- and post-trade transparency regulation (LBF vol. 21) 2021/5.V.1.2.4:5.V.1.2.4 Admitted to trading on an RM or traded on a trading venue

EU Equity pre- and post-trade transparency regulation (LBF vol. 21) 2021/5.V.1.2.4

5.V.1.2.4 Admitted to trading on an RM or traded on a trading venue

Documentgegevens:

mr. J.E.C. Gulyás, datum 01-02-2021

Datum: 01-02-2021
Auteur: mr. J.E.C. Gulyás
JCDI: JCDI:ADS266577:1
Vakgebied(en): Financieel recht / Bank- en effectenrecht
Financieel recht / Europees financieel recht
Financiële dienstverlening / Financieel toezicht

The scope of the MiFID II trading obligation is confined to shares admitted to trading on an RM or traded on a trading venue (RM or MTF).1MiFID II covers provisions for when a financial instrument is admitted to trading on an RM.2MiFID II does not define the term ‘traded on a trading venue’.

Following the MiFID II terminology, all shares traded in the systems of an RM or MTF fall under the scope of ‘traded on a trading venue’. The term ‘system’ includes (1) share trades that place through the systems of an RM/MTF (e.g. continuous auction order-book), as well as (2) those share trades taking place under the rules of the RM/MTF.3 The result would be that traded on a trading venue includes both shares that are traded on the RM or MTF (a) at the request of the issuer, as well as (b) those based on an unilateral decision of the relevant trading venue and a sponsor firm (i.e. without issuer consent).4

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Art. 23(1) MiFIR.

Art. 51 MiFID II.

Recital 7 MiFIR.

For example, most Swiss issuers had their shares traded on one or more trading venue, often based on an unilateral decision of the relevant trading venue and a sponsor firm (CapLaw, ‘Expiration of Swiss Stock Exchange Equivalence and Activated Protective Measure’, 7 August 2019 (available at: https://www.caplaw.ch/2019/expiration-of-swiss-stock-exchange-equivalence-and-activated-protective-measure/)). The situation changed after events in connection with the equivalence decision of Switzerland (see paragraph 1.3.3 below). See in this context also the Commission who refers to shares traded on an EU MTF without a prospectus approved in an EU Member State (e.g. US blue chip company, such as Apple, listed on a US exchange, but also traded on an EU MTF) (Commission, Public consultation on the review of the MiFID II/MiFIR regulatory framework, 17 February 2020, p. 23).