9.II.2.4.5 Level 1 text: Increased role of ESMA and the Commission

A main aim of the Commission in drafting MiFIR was to remove differences in national regimes when it came to equity post-trade data publication. It was the view of the Commission that any deviation on the national level would lead to market distortions and regulatory arbitrage, preventing the development of a level playing field.1 In line with the foregoing, the Commission proposed to enhance the amount of supervisory convergence in terms of deferred publication under MiFID II. Although the Commission proposed to leave NCAs in charge in granting approval for deferral arrangements, a new role would be given to ESMA. The Commission proposed ESMA to monitor the deferred publication arrangements and to submit an annual report to the Commission on how the arrangements are applied in practice.2 The European Parliament accepted the Commission’s proposal. The European Parliament added that ESMA also needed to be able to engage in binding mediation in case of disagreement an NCA with the deferral arrangement in another Member State.3 The Council then removed the ability of ESMA to engage in binding mediation in its proposal.4 The position of the Council was reversed at a later stage in the MiFID II negotiation process. The latter is visible in the final text of MiFID II (MiFIR). MiFID II makes clear that, where an NCA disagrees with the deferral or with the effective application of the authorization granted, the NCA may refer the matter back to ESMA. ESMA may in this situation engage in binding mediation as available under the ESMA Regulation 2010.5

The drafting process of the MiFID II deferral design illustrates that there was consensus in terms of enhancing supervisory convergence in the sense of letting ESMA monitor the deferred publication arrangements, as well as providing an annual report to the Commission. Providing ESMA with binding mediation powers was by contrast contentious. However, neither the Commission, European Parliament, nor Council proposed to give ESMA the ability to give non-binding opinions on the deferral arrangements. Such powers for ESMA were proposed in the context of the MiFID IIpre-trade waiver regime.6 The difference between the pre-trade waiver and post-trade deferral regime seems to stem from the situation under MiFID I. Under MiFID I especially the authorisation of waivers (not: deferral) was complex and contentious among Member States.7 It therefore did not seem necessary to grant ESMA similar powers in the context of deferral under MiFID II.

A similar line of thought is reflected in the final MiFID II text (MiFIR). ESMA is required to monitor the deferral arrangements as authorised by NCAs. ESMA needs to provide an annual report on the application of deferred publication to the Commission. ESMA can engage in binding mediation where an NCA disagrees with a deferral arrangement provided by another NCA. The intention here is to enhance supervisory convergence in terms of deferral of equity post-trade publication.8MiFIR does not provide ESMA the ability to give a non-binding opinion on the application of the deferral arrangement, as is the case for the pre-trade waiver regime. In effect, MiFID II leaves some room for national divergences across Member States. However, the risks inherent in different deferral arrangements are mitigated by the rule-based MiFID II requirements. Highly detailed MiFID II provisions are in place to ensure similar deferral publication arrangements are applied across Member States (see paragraphs above).9