5.IV.1.4.2 Level 1 and Level 2 text: change in publication channels

Compared to MiFID I, a second change is that MiFID II no longer permits publication of unexecuted limit orders through ‘other means’, such as the website of the investment firm or ‘third parties’ (MiFID I situation). In case an investment firm does not send the unexecuted client limit order to an RM or an MTF, MiFID II requires the order to be made public through a data reporting service provider. In this context, ESMA provided recommendations to the Commission in drafting MiFID II.

ESMA examined two options for the situation where an investment firm did not route the unexecuted client limit order to an RM or MTF (and where the Member State option was not exercised: see paragraph above). The options were (1) publication through a data reporting service provider (i.e. the new MiFID II category) or (2) publication through the proprietary arrangements’ of the investment firm. ESMA was sceptical about both options, but in the end suggested publication through a data reporting service provider would be possible, given the MiFID II Level 1 mandate.1

The Commission’s position reflected a similar view as ESMA. The latter is evident in the final MiFID II text. MiFID II covers the possibility for investment firms to publish unexecuted client limit orders through a data reporting services provider (in addition to sending the order to an RM or MTF). Publication through the proprietary arrangements of an investment firm is not permitted under MiFID II (see paragraph above).