18.IV.1.2.1.2 Difference 2: change in venues

Whilst the ISD pre- and post-trade transparency rules were limited to RMs, the MiFID I equity pre- and post-trade transparency obligations applied to a wider range of venues, namely RMs, MTFs, and investment firms operating outside RMs/MTFs (including SIs). The rationale of the broader MiFID I scope was to ensure sufficient pre- and post-trade transparency in the competitive market setting envisioned under MiFID I, regardless where the (potential) transaction took place.1 The MiFID I post-trade transparency requirements applied to RMs, MTFs, and investment firms operating outside such venues (including, but not only SIs). The MiFID I post-trade transparency regime was almost the same for RMs, MTFs, and investment firms operating outside RMs/MTFs. ‘Almost the same’, since investment firms operating outside RMs/MTFs were subject to a bit lighter framework (reflecting the less regulated category of investment firms operating outside RMs/MTFs).2 MiFID I required real-time post-trade data publication. Deferral was permitted under certain conditions in order to preserve liquidity provision of investment firms that (a) took temporary risk positions by trading on own account (b) in providing such liquidity to a client.3

The MiFID I pre-trade transparency regime was more complex. MiFID I covered a distinct pre-trade transparency regime for (1) RMs and MTFs, (2) SI, and (3) investment firms operating outside RMs and MTFs (including SIs). RMs and MTFs were subject to the strictest pre-trade transparency regime, which reflected the public and organised status of RMs and MTFs. SIs were subject to a lighter pre-trade transparency regime due to the SI position risks in always trading on own account (while executing client orders).4 The lightest regime applied to investment firms operating outside RMs and MTFs (including SIs) in the form of the client limit order display-rule.5 As a means to protect liquidity against pre-trade transparency risks (e.g. market impact or information leakage), MiFID I covered exceptions to the pre-trade transparency regimes. The MiFID I pre-trade transparency exceptions were adjusted to the specific nature of (1) RMs and MTFs (i.e. prohibited from trading on own account), (2) SIs (always trading on own account through executing client orders), and (3) investment firms operating outside RMs and MTFs (e.g. agency crossing or SI).