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ESMA issues Q&As on the implementation of the double volume cap under MiFID II

03 October 2016

The European Securities and Markets Authority (ESMA) has issued today a Question and Answers (Q&A) document regarding the implementation of the double volume cap under the Market in Financial Instruments Directive and Regulation (MiFID II/ MiFIR).  MiFID II introduces a so-called “double” volume cap mechanism which limits the use of reference price waivers and negotiated price waivers under the new transparency regime of MIFID II.

The purpose of the Q&A is to promote common supervisory approaches and practices in the application of MiFID II/ MiFIR in relation to the double volume cap provisions. It provides responses to questions posed by the general public, market participants and competent authorities in relation to the practical application of MiFID II/MiFIR. This Q&A provides details regarding:

  • clarifications of what data has to be taken into consideration in respect of volumes traded under MiFID I waivers in 2017;
  • the application of the double volume cap regarding MTF only shares, depositary receipts, certificates, and newly issues instruments; and
  • Mid-month reports.

The Q&A mechanism is a practical convergence tool used to promote common supervisory approaches and practices under the ESMA Regulation.