4.V.3 Concluding remarks

MiFID I contained equity pre-trade transparency obligations not only for market participants, but also for NCAs and CESR. The reason was that the MiFID I equity pre-trade transparency regime relied on thresholds, namely: (1) a ‘liquid market’ (and the related ‘standard market size’ (relevant for the SI publication obligations) and (2) ‘large in scale orders’ (relevant for the RM/MTF large in scale-waiver/exception to the client limit order display rule). MiFID I required NCAs to collect data, make calculations and estimates, and publish the results (unless CESR already published the results). NCAs also needed to publish a list of the investment firms that qualified as SIs in their territory. CESR was required to consolidate the individual NCA results, as well as the SI lists, and publish it in a single place. CESR fulfilled its obligations through setting up and maintaining two databases, being the MiFID I Database for Shares Admitted to Trading on an RM and the MiFID I Database for SIs.

The MiFID I regime was top-down in the sense that it created a new operational regime on the EU level, rather than leaving the calculations and estimates up to national regulation (ISD situation). This was the result of the MiFID I framework that introduced EU thresholds for equity pre-trade transparency. The top-down regime consisted out of (i) the MiFID I text and (ii) CESR support, both legal and operational (CESR advised on the MiFID I text, provided informal guidance, and operated the two databases). The underlying goal of the top-down MiFID I regime was to enable market participants (and NCAs in supervising the rules) to have access to the thresholds relevant for the MiFID I equity pre-trade transparency regime. Another aim was to have the same calculations and estimates across the EU. In other words, through a top-down approach, the EU wanted to establish: (a) a common degree of equity pre-trade transparency (similar calculations across the EU), (b) a related level playing field, and (c) a regime that would work in practice (data collection, calculation, and publication).