ESMA promotes clarity to market participants on best execution reporting
The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, is issuing a Public Statement to promote coordinated action by National Competent Authorities (NCAs) under MiFID II.
ESMA expects NCAs not to prioritise supervisory actions towards execution venues relating to the periodic reporting obligation on them to publish the RTS 27 reports, from 1 March 2023 until the forthcoming legislative amendment[1] to the relevant Article of MiFID II applies.
The Directive amending MiFID II, under the Capital Markets Recovery Package temporarily suspended the RTS 27 reporting requirement until 28 February 2023. The European Commission’s legislative proposal on the MiFID II/MiFIR review includes a proposal to delete the obligation to publish RTS 27 reports. This proposal is currently subject to the legislative procedure at the European Parliament and the Council of the EU. In this context, ESMA has observed a lack of clarity among market participants on the suspension of the obligation to publish RTS 27 reports, if the negotiations by the Council of the European Union and the European Parliament exceeded the expiration date of this temporary suspension (ie, 28 February 2023).
Based on available information, the MiFID II/MiFIR legislative procedure is likely to exceed 28 February 2023. Therefore, it is also likely that RTS 27 reporting obligation would temporarily re-apply after 28 February 2023 until the reviewed MiFID II Directive would apply.
[1] Under the assumption that the European Parliament and the Council of the EU agree in the context of the MiFID II/MiFIR review to delete the RTS 27 reporting requirement.