12.IV.4 Level 2: excluding SI identity from equity post-trade reports

As noted, MiFID I permitted SIs to hide their identity in post-trade reports, provided certain conditions were met.1 CESR advised the Commission in this context in drafting MiFID I. Initially, CESR proposed that the identity of all investment firms operating outside an RM/MTF would be included in the equity post-trade reports. Several respondents to CESR’s consultation objected to this, arguing it would create a non-level playing field between investment firms and RMs/MTFs (RMs and MTFs face no counterparty risks, in contrast to investment firms trading on own account).2 CESR changed its proposal by requiring the publication of identity only in case of systematic internalisation. CESR was of the view that in the case of systematic internalisation this information (identity of the SI) would be relevant for the public in order to be able to compare the different trade execution venues.3

The Commission partially accepted CESR’s recommendations. This is visible in the final MiFID I text. On the one hand, MiFID I did not require investment firms to display their identity in equity post-trade reports. However, the MiFID I text is more lenient towards SIs compared to CESR’s recommendations. MiFID I permitted SIs to remove their identity from post-trade reports under certain conditions.4 The rationale here was to protect SIs against position risks.5