ESMA issued an opinion with the interim transparency calculations for non-equity instruments in relation to the implementation of the Markets in Financial Instruments Directive and Regulation (MiFID II/MiFIR). These calculations specify the transparency regime applicable to trading in secondary markets from January 03, 2018, when MiFID II will enter into force. ESMA also published the frequently asked questions, or FAQ, on MiFID II—Interim Transparency Calculations.
Therefore, ESMA is publishing information on the liquidity classification of financial instruments and the sizes of large in scale (LIS) compared to normal market size and the size specific to the instrument (SSTI). ESMA issued these transparency calculations for all non-equity instruments, except for bonds, which have been classified as liquid, in accordance with the MIFID/MIFIR regulatory standards on transparency requirements. The transparency calculations are based on data submitted by EU trading venues. The publication of LIS and STTI thresholds per bond type, which had been planned for July 03, 2017, has been delayed, as ESMA needs to perform an additional quality review of the information submitted by third parties for this exercise. These interim calculations for bonds will now be published in August 2017.
MiFID II introduces transparency requirements for bonds, structured finance products, emission allowances, and derivatives, with powers for national competent authorities to waive or defer the transparency obligations if instruments do not have a liquid market or if an order or transaction exceeds a certain size.
Keywords: Europe, ESMA, Securities, MiFID II, MiFIR, Transparency Calculations, Transparency Requirements