June 07, 2017

The ESMA Chair Steven Maijoor delivered the keynote address at the Futures Industry Association IDX Conference in London. His address focused on progress being made on implementation and preparation for Markets in Financial Instruments Directive and Regulation (MiFID II/MiFIR), the exit of the UK from EU, and the review of ESAs.

He highlighted that a week ago ESMA published its response to the review of ESAs. The response contained recommendations that, ESMA believes, will improve its functioning and better enable it to achieve the objectives of investor protection and stable and orderly EU financial markets. The key proposals concerned four main areas: international aspects of EU financial markets; direct supervision; supervisory convergence; and access to data and reporting. Furthermore, the ESMA Chair reinforced that MiFID II/MiFIR will come into effect on January 03, 2018 and there will be no further delay in its implementation. He detailed the progress made over the last few months and ESMA's support of market participants in preparation for the implementation of MiFID II/MiFIR. ESMA is on track with all MIFID II/MIFIR IT projects, in particular the Financial Instruments Reference Data System (comprising the collection of reference and trading data and the transparency calculations) and the double volume cap mechanism.

 

ESMA will publish, at the beginning of July, the transitional calculations for non-equity instruments and the liquidity status of all instruments except bonds, thus providing more certainty on the new transparency regime and giving market participants half a year to prepare their systems. The publication of the transitional calculations on the liquidity status of bonds is scheduled for end November and the beginning of December, in addition to the transitional calculations for most equity instruments. With regard to the trading obligation for derivatives, ESMA is about to finalize a consultation paper that is expected to be published in the coming weeks. The paper carefully considers the feedback received to the discussion paper that was published last autumn and ESMA tried to improve the data analysis by supplementing trade repository data with trading data requested from multilateral trading facilities covering the second half of 2016. Given the firm intention of the co-legislators and the EC that the trading obligation becomes effective as soon as possible, there will be only a shortened consultation period of six weeks and ESMA aims to deliver the draft regulatory technical standards to the EC in early autumn. The G20 agreed on the trading obligation back in 2009 and it has been implemented in the U.S. since 2014. Therefore, all stakeholders have had sufficient time to prepare for the trading obligation, thus allowing for its implementation in January 2018, said the ESMA Chair.

 

Related Link: Speech (PDF)

Keywords: Europe, ESMA, Banking, Securities, MiFID II, Trade Obligations

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