9.III Investment firms operating outside an RM or MTF

The foregoing paragraph examined the MiFID II equity post-trade transparency regime for RMs and MTFs. Besides trading on an RM or MTF, MiFID II also permits investment firms to trade outside an RM or MTF.1 In contrast with the previous regime (MiFID I), MiFID II limits the possibilities for investment firms in trading outside RMs and MTFs when it comes to shares. Where MiFID I permitted free competition across different types of order execution platforms, MiFID II encompasses a share trading-obligation.2 The rationale of the share trading-obligation is to concentrate trades on certain venues in order to preserve sufficient liquidity and price formation.3 The obligation does not go so far as the optional ISD concentration-rule, since MiFID II permits sufficient competition among different types of venues.4 The MiFID II share trading-obligation does not apply to other equity instruments, being depositary receipts, ETFs, certificates and other similar financial instruments.5

Where an investment firm concludes a transaction outside an RM or MTF in respect of an equity instrument traded on a trading venue, the investment firm is subject to the MiFID II equity post-trade transparency regime. The equity post-trade transparency regime is overall similar to the equity post-trade transparency regime for RMs and MTFs. Some differences are in place to accommodate the specific functionalities of investment firms trading outside RMs/MTFs.