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Trading and Venues

Trading and Venues

MiFID II and MiFIR will ensure fairer, safer and more efficient markets and facilitate greater transparency for all participants. 

MiFID II and MiFIR empowered ESMA to develop numerous draft regulatory technical standards (RTS) and draft implementing technical standards (ITS) and ESMA delivered three sets of technical standards

The Commission adopted the technical standards in the course of 2016 and 2017.

The rules contained in these draft technical standards, will bring the majority of non-equity products into a robust regulatory regime and move a significant part of OTC trading onto regulated platforms.

Fairer, safer and more efficient markets

  • tests to determine whether a non-financial firm’s speculative investment activities are so great that it should be subject to MiFID II;
  • ranges for the new EU-wide commodity derivatives position limits regime;
  • rules governing high-frequency-trading, imposing a strict set of organisational requirements on investment firms and trading venues;
  • provisions regulating the non-discriminatory access to central counterparties (CCPs), trading venues and benchmarks, designed to increase competition;
  • provisions requiring trading venues to offer disaggregated data on a reasonable commercial basis.

Greater transparency

  • thresholds for the pre-trade and post-trade transparency regimes extended to equity-like instruments, bonds, derivatives, structured finance products and emission allowances;
  • a newly-introduced liquidity assessment for non-equity instruments;
  • a newly-introduced trading obligation for shares and certain derivatives to be traded only on regulated platforms and, in the case of shares, systematic internalisers, instead of over-the-counter;
  • a double volume cap mechanism to limit dark trading and reshape the use of waivers for shares and equity-like instruments;
  • newly-introduced reporting requirements for commodity derivatives.

Stronger investor protection

  • improved disclosure to strengthen the best execution regime.

ESMA has already adopted and continues to work on adopting, where necessary, Level 3 measures (Guidelines, Q&As, opinions etc) to provide guidance to the different stakeholders and ensure consistent implementation across the Union.