ESMA published details of its action plan (within its updated Q&As on MiFID II and MiFIR transparency topics) for systematic internalizer regime calculations, ahead of their publication on August 01, 2018. The action plan of ESMA focuses on equity, equity-like instruments, and bonds while postponing the publication for derivatives and other instruments to February 01, 2019.
ESMA will publish results only if trading venues have submitted data for at least 95% of all trading days and will not trigger publication if the quality of the data received for an instrument is not considered sufficient. The data publications will also incorporate OTC trading to the extent it has been reported to ESMA. The updated implementation schedule means ESMA will publish the necessary EU wide data, for the first time by:
- August 01, 2018—covering a period from 3 January 2018 to 30 June 2018 for equity, equity-like and bond instruments. Investment firms will then have to perform their first assessment and, where appropriate, comply with the systematic internalizer obligations by September 01, 2018.
- February 01, 2019—covering a period from July 01, 2018 to December 31, 2018 for ETCs, ETNs, SFPs, securitized derivatives, emission allowances and derivatives. Systematic internalizers will have to eventually comply with the obligations from March 01, 2019.
ESMA publications will be updated on a quarterly basis in respect of a rolling six-month assessment period. Investment firms are expected to self-assess and comply after a reduced two-week period. ESMA notes that, for the systematic internalizer calculations, having a high level of completeness in the reported information is crucial. The updated Q&As on MiFID II and MiFIR transparency topics also provide clarification on reporting of a new ISIN in FIRDS and FITRS following a corporate action and on application of the DVC to instruments that have been subject to a corporate action.
To reach comprehensive results ahead of publication on August 01, additional work is required by ESMA, national competent authorities, and trading venues. To achieve a high completeness ratio allowing results to be published for a high number of instruments, ESMA has performed a first completeness check of the data available in the system for the period January 03 to June 01, 2018 at the beginning of June. Based on this work, ESMA has liaised with national competent authorities and trading venues to increase the completeness rate as quickly as possible.
Keywords: Europe, EU, Securities, MiFID II, MiFIR, Transparency, Systematic Internalizers, Q&A, ESMA
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