Featured Product

    ESMA Chair on Achievements and Priorities of MiFID II Implementation

    June 21, 2018

    The ESMA Chair Steven Maijoor spoke at the FESE Convention 2018 in Vienna about the achievements and current priorities of the implementation of the second Markets in Financial Infrastructure Directive (MiFID II). He highlighted that MiFID II has been in place for nearly six months and now is a good time for a preliminary review. He discussed the findings of the assessment of ESMA on the first months of MiFID II as well as issues identified in the area of secondary markets on which ESMA intending to focus in the coming months. Finally, he briefly examined the need for a third-country regime for trading venues in MiFID II.

    He suggested that it appears that trading flow previously executed under one of the two waivers covered by the double volume cap is flowing to Systematic Internalizers and periodic auction trading systems. Periodic auction trading systems are increasingly attracting trading flow and, since the first suspension of dark trading in March, trading volumes on periodic auction trading systems have tripled. This has triggered a concern that some periodic auction systems may be designed with the intention to circumvent the double volume cap. Therefore, ESMA is conducting a fact-finding exercise on the different periodic auction trading systems to understand the various features of these systems. If deemed necessary, this may result in further ESMA measures or recommendations.

    Moreover, following the application of MiFID II, ESMA was made aware of substantial increases in the costs of market data, reaching at times up to 400% compared to prices charged prior to January 03, 2018. In addition, ESMA received complaints from stakeholders that not all trading venues and Approved Publication Arrangements publish the required information in accordance with the reasonable commercial basis principles in MiFID II. ESMA is gathering further information on this issue and will assess the feedback over the summer—and in particular test the level of compliance with the rules in place. Should it be necessary, ESMA may provide later this year further guidance on how these rules should be applied. ESMA is also considering to propose an amendment to the tick size methodology with a two-fold aim: addressing the level playing field issue when the most liquid market is outside the EU and ensuring that a harmonized tick size continues to apply across all EU trading venues for any given instrument. To that end, ESMA intends to issue a consultation paper around mid-July. The consultation paper is likely to suggest different options for setting an appropriate tick size for instruments with their most liquid market outside the EU.

    With respect to Brexit, he added that to ensure a consistent approach and to ensure that risks for the EU related to third-country venues are addressed, it is essential to introduce a harmonized EU regulatory and supervisory framework governing third-country venues. EC has been proposing to amend the MiFIR equivalence conditions for third-country investment firms ahead of Brexit and ESMA would welcome an initiative by EC with respect to third-country trading venues. He said he believes that a third-country regime for trading venues would cover both regulated markets and trading venues operated by investment firms or their equivalent, as there seems to be little justification to treat them differently. Any regime should ensure that a trading venue in the third country complies with requirements which are equivalent to those for EU trading venues, and that the EU has the supervisory tools to address risks relevant to the EU. There also needs to be adequate information exchange. He concluded that these are some preliminary thoughts and ESMA would be ready to provide further technical advice to the EU institutions on this issue, if required.

     

    Related Link: Speech

    Keywords: Europe, EU, Securities, MiFID II, Trading Venues, Brexit, Third Country Regime, Equivalence, ESMA

    Related Articles
    News

    SEC Finalizes Capital and Margin Requirements for Security-Based Swaps

    SEC adopted a package of rules and rule amendments to establish capital, margin, and segregation requirements for security-based swaps, under Title VII of the Dodd-Frank Act.

    August 22, 2019 WebPage Regulatory News
    News

    ECB Revises Prudential Provisioning Expectations for New NPEs

    ECB is revising its supervisory expectations for prudential provisioning of new non-performing exposures (NPEs) specified in the “Addendum to the ECB Guidance to banks on non-performing loans” (Addendum)

    August 22, 2019 WebPage Regulatory News
    News

    CFTC Proposes to Revise Information Collection on Margin Requirements

    CFTC is requesting comments on the burdens associated with certain aspects of the Margin Requirements for Uncleared Swaps for Swap Dealers and Major Swap Participants (final rule).

    August 21, 2019 WebPage Regulatory News
    News

    FASB to Delay Effective Date for Insurance Contracts Standard

    FASB issued a proposed Accounting Standards Update that would grant all insurance companies that issue long-duration contracts, such as life insurance and annuities, additional time to apply the standard that addresses this area of financial reporting.

    August 21, 2019 WebPage Regulatory News
    News

    EBA Publishes Phase 2 of Technical Package on Reporting Framework 2.9

    EBA published phase 2 of its technical package on the reporting framework 2.9, which includes validation rules, Data Point Model (DPM) data dictionary, and XBRL taxonomies.

    August 21, 2019 WebPage Regulatory News
    News

    FSB Publishes Responses to Its Consultation Related to SME Financing

    FSB published responses received to the consultation on a report on the evaluation of the effects of financial regulatory reforms on small and medium-sized enterprise (SME) financing.

    August 21, 2019 WebPage Regulatory News
    News

    APRA Revises Related Entities Standard for Banks

    APRA published a strengthened prudential standard APS 222 on associations with related entities, with the aim to mitigate contagion risk within banking groups.

    August 20, 2019 WebPage Regulatory News
    News

    EBA and ESMA Issue Joint Response to EC Letter on Crypto-Assets

    EBA and ESMA issued a joint response to the EC letter, from July 19, 2019, on crypto-assets.

    August 20, 2019 WebPage Regulatory News
    News

    FSB on Responses to Consultation on Wind-Down of Trading Portfolios

    FSB published responses received to the consultation on the solvent wind-down of the derivatives and trading book portfolio of a global systemically important bank (G-SIB).

    August 19, 2019 WebPage Regulatory News
    News

    FSB Publishes Responses to Consultation on Resolvability Disclosures

    FSB published responses received to the consultation on disclosures for resolution planning and resolvability of banks.

    August 19, 2019 WebPage Regulatory News
    RESULTS 1 - 10 OF 3681