EU Equity pre- and post-trade transparency regulation (LBF vol. 21) 2021/6.II:6.II Definition of equity post-trade transparency

EU Equity pre- and post-trade transparency regulation (LBF vol. 21) 2021/6.II

6.II Definition of equity post-trade transparency

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The ISD, MiFID I, and MiFID II do not cover an explicit description of what (equity) post-trade transparency is. The Commission gave an interpretation of post-trade transparency under MiFID I. The Commission noted that:

‘Post trade transparency refers to the obligation to publish a trade report every time a transaction of a share has been concluded (…).’1

The Commission’s description of post-trade transparency is three-dimensional. It includes: (1) an obligation to publish (2) a trade report concerning a concluded trade (i.e. a post-trade report) (3) with respect to a share. As will be shown in chapter 8, under MiFID I post-trade transparency requirements only applied to shares (admitted to trading on an RM). The scope in terms of financial instruments differed from the ISD to MiFID II. It seems reasonable to assume that the Commission’s interpretation covers the financial instruments as mandated under the post-trade transparency requirements of the ISD, MiFID I, respectively MiFID II. For example, under MiFID II the term post-trade transparency would also cover ‘equity’ (i.e. shares, depositary receipts, ETFs, certificates, and other similar financial instruments) and ‘non-equity’ instruments.2

For the purposes of this book, I believe it is more clarifying to use a two-dimensional, rather than a three-dimensional, definition of post-trade transparency. I consider post-trade transparency to be a two-dimensional concept, that is – (a) post-trade information (i.e. information on completed trades) that is (b) published. I would suggest that the regulation of post-trade transparency at least means an obligation to publish post-trade information (i.e. mandatory publication of post-trade data), for example, as required under national law or MiFID II. Post-trade transparency as a two-dimensional concept permits to distinguish between (i) regulatory-driven (top-down) and (ii) market-driven (bottom-up) solutions for the publication of post-trade information. Such a distinction is hard to make where one would use the Commission’s three-dimensional definition (obligation, publication, and post-trade information).3

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