Supervisory convergence

The European Securities and Markets Authority (ESMA) has today updated its Questions and Answers regarding market structures and transparency issues under the Market in Financial Instruments Directive (MiFID II) and Regulation (MiFIR).

The new Q&As provide clarification on the following topics:

  • The use of pre-arranged transactions for non-equity instruments (Amendment to an existing Q&A);
  • The hedging exemption of Article 8 of MiFIR; 
  • The treatment of constant maturity swaps; and
  • The application of the tick size regime to periodic auction systems. 

The purpose of these Q&As is to promote common supervisory approaches and practices in the application of MiFID II and MiFIR. They provide responses to questions posed by the general public and market participants in relation to the practical application of level 1 and level 2 provisions relating to transparency and market structures issues.

ESMA will continue to develop these Q&As in the coming months and will review and update them where required.

The European Securities and Markets Authority (ESMA) has today updated its Questions and Answers (Q&As) regarding the implementation of the Central Securities Depository Regulation (CSDR).

The updated Q&As provide answers to questions regarding practical issues on the implementation of the new CSDR regime. The latest CSDR Q&As clarify aspects regarding the scope of internalised settlement reporting, namely: 

 

investment firms are not required to report in case they do not execute transfer orders themselves, which they forward in their entirety to a custodian, irrespective of whether the custodian is established in the EEA or not; and 

trade netting as such does not qualify as internalised settlement.

 

Q&As are an important tool to promote common supervisory approaches and practices in the application of CSDR. This document is aimed at national competent authorities under the Regulation to ensure that, in their supervisory activities, their actions are converging along the lines of the responses adopted by ESMA. It should also help investors and other market participants by providing clarity on CSDR requirements.

 

Background

The aim of CSDR is to harmonise certain aspects of the settlement cycle and settlement discipline and to provide a set of common requirements for CSDs operating securities settlement systems across the EU. ESMA will continue to develop Q&As on the CSDR in the coming months and will review and update them where required.

The European Securities and Markets Authority (ESMA) has today updated its Questions and Answers on the implementation of investor protection topics under the Market in Financial Instruments Directive and Regulation (MiFID II/ MiFIR).

The Q&As on MiFID II and MiFIR investor protection and intermediaries topics provide a new answer on:

  • Best execution - Classification of financial instruments under RTS 27 if ESMA has not published any calibrated market sizes

The purpose of these Q&As is to promote common supervisory approaches and practices in the application of MiFID II and MiFIR.

ESMA will continue to develop this Q&A document on investor protection topics under MiFID II and MiFIR, both adding questions and answers to the topics already covered and introducing new sections for other MiFID II investor protection areas not yet addressed in this Q&A document.

 

The European Securities and Markets Authority (ESMA) has today updated its Questions and Answers (Q&As) regarding the implementation of the Central Securities Depository Regulation (CSDR).

The updated Q&As provide answers to questions regarding practical issues on the implementation of the new CSDR regime. The latest CSDR Q&A clarifies aspects regarding the scope of financial instruments subject to internalised settlement reporting.
Q&As are an important tool to promote common supervisory approaches and practices in the application of CSDR. This document is aimed at national competent authorities under the Regulation to ensure that, in their supervisory activities, their actions are converging along the lines of the responses adopted by ESMA. It should also help investors and other market participants by providing clarity on CSDR requirements.

Background

The aim of CSDR is to harmonise certain aspects of the settlement cycle and settlement discipline and to provide a set of common requirements for CSDs operating securities settlement systems across the EU. ESMA will continue to develop Q&As on the CSDR in the coming months and will review and update them where required.

 

The European Securities and Markets Authority (ESMA) has today updated its Questions and Answers (Q&As) regarding the implementation of the Central Securities Depository Regulation (CSDR).

The updated Q&As provide answers to questions regarding practical issues on the implementation of the new CSDR regime. The latest batch of CSDR Q&As clarify aspects regarding the process applicable to the provision of notary or central maintenance services in other Member States, passporting procedure. The updated Q&As:

  • Clarifies the interaction between the main authorisation procedure (CSDR Art 17) and the passporting procedure (CSDR Art 23(2)), and the benefit of the grandfathering rule for notary and central maintenance services provided on a cross-border basis prior to the authorisation of the CSD;
  • Details what should be considered as a change in the range of services provided on a cross-border basis (provision of new core service or provision of same service in respect of a new type of financial instrument);
  • Clarifies how “where relevant” used in Article 23(3)(e) of CSDR should be understood: whenever there are requirements under the national law of the host Member State that the CSD has determined as being relevant for the users of each cross-border service it provides or intends to provide; and
  • Addresses the process to be followed in case a host Member State authority disapproves the assessment of the measures proposed by the CSD to comply with the law of that host Member State.

Q&As are an important tool to promote common supervisory approaches and practices in the application of CSDR. This document is aimed at national competent authorities under the Regulation to ensure that, in their supervisory activities, their actions are converging along the lines of the responses adopted by ESMA. It should also help investors and other market participants by providing clarity on CSDR requirements.

Background

The aim of CSDR is to harmonise certain aspects of the settlement cycle and settlement discipline and to provide a set of common requirements for CSDs operating securities settlement systems across the EU. ESMA will continue to develop Q&As on the CSDR in the coming months and will review and update them where required.

The European Securities and Markets Authority (ESMA) has today updated its Questions and Answers (Q&As) regarding transparency issues under the Market in Financial Instruments Directive (MiFID II) and Regulation (MiFIR).

The updated Q&As provide clarification on the following topics:

  • The mandatory systematic internaliser (SI) regime;
  • The voluntary SI regime; and,
  • Quoting obligation for SI in non-TOTV instruments.

Updates to obsolete Q&As

ESMA also reviewed its published Q&As on transparency issues with the objective of deleting or amending obsolete Q&As such as those addressing issues pertaining to either 3 January 2018, or the following 12 months. This concerns five Q&As:

  • First calculations to be published on 3 January 2018 - shares admitted to trading on RM (Q&A 1 of section 6 on the double volume cap mechanism);
  • First calculations to be published on 3 January 2018 - MTF only shares, depositary receipts, certificates (Q&A 2 of section 6 on the double volume cap mechanism);
  • Reporting of a new ISIN in FIRDS and FITRS following a corporate action (Q&A 13 of section 2 on General Q&As on transparency topics);
  • Pre-trade transparency waivers under MiFID I (Q&A 1 of section 5 on Pre-trade transparency waivers); and,
  • Compliance with the SI regime and notification to NCAs (Q&A 6(b) of section 7 on the systematic internaliser regime).

Background

The purpose of these Q&As is to promote common supervisory approaches and practices in the application of MiFID II and MiFIR. They provide responses to questions posed by the general public and market participants in relation to the practical application of level 1 and level 2 provisions relating to transparency and market structures issues.

ESMA will continue to develop these Q&As in the coming months and will review and update them where required.

The European Securities and Markets Authority (ESMA) has today updated its Questions and Answers (Q&As) regarding transparency issues under the Market in Financial Instruments Directive (MiFID II) and Regulation (MiFIR).

The updated Q&As provide clarification on the following topics:

  • The mandatory systematic internaliser (SI) regime;
  • The voluntary SI regime; and,
  • Quoting obligation for SI in non-TOTV instruments.

Updates to obsolete Q&As

ESMA also reviewed its published Q&As on transparency issues with the objective of deleting or amending obsolete Q&As such as those addressing issues pertaining to either 3 January 2018, or the following 12 months. This concerns five Q&As:

  • First calculations to be published on 3 January 2018 - shares admitted to trading on RM (Q&A 1 of section 6 on the double volume cap mechanism);
  • First calculations to be published on 3 January 2018 - MTF only shares, depositary receipts, certificates (Q&A 2 of section 6 on the double volume cap mechanism);
  • Reporting of a new ISIN in FIRDS and FITRS following a corporate action (Q&A 13 of section 2 on General Q&As on transparency topics);
  • Pre-trade transparency waivers under MiFID I (Q&A 1 of section 5 on Pre-trade transparency waivers); and,
  • Compliance with the SI regime and notification to NCAs (Q&A 6(b) of section 7 on the systematic internaliser regime).

Background

The purpose of these Q&As is to promote common supervisory approaches and practices in the application of MiFID II and MiFIR. They provide responses to questions posed by the general public and market participants in relation to the practical application of level 1 and level 2 provisions relating to transparency and market structures issues.

ESMA will continue to develop these Q&As in the coming months and will review and update them where required.

The European Securities and Markets Authority (ESMA) has today published a Supervisory Briefing to ensure compliance with the MiFIR pre-trade transparency requirements in commodity derivatives.

The Supervisory Briefing was developed after ESMA became aware that the provisions were not implemented in a consistent manner across the European Union. It aims to increase supervisory convergence among national competent authorities (NCAs), in their implementation of the requirements, and to provide a common timetable for the enforcement of the commodity derivatives pre-trade transparency regime, with the objective of ensuring a level playing field across EU trading venues.

It clarifies that NCAs should ensure that trading venues do not operate trading functionalities which allow the formalisation of negotiated trades in the absence of a compliant waiver.

To achieve this objective, the Supervisory Briefing sets the following common three-step timetable:

  1. NCAs should gather information on the plans of each relevant trading venue to comply with the pre-trade transparency requirements, and ESMA should assess those plans. At the time of publication, this first phase has already been completed;
  2. NCAs should make sure that all the relevant trading venues either operate under a compliant pre-trade waiver or are pre-trade transparent. This phase should be completed by the end of 2019; and
  3. NCAs should take supervisory measures in case of non-compliance, starting from 1 January 2020

Next steps

ESMA will closely cooperate with NCAs and regularly monitor the application of the Supervisory Briefing. In particular, ESMA will review the progress and measures undertaken six months after the beginning of the third step.

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