|Printable version||E-mail this to a friend|
ESMA consults on transparency rules for package orders under MiFID II
The European Securities and Markets Authority (ESMA) yesterday opened a public consultation on draft regulatory technical standards (RTS) regarding the treatment of package orders under the amended Markets in Financial Instruments Directive (MiFID II) and Regulation (MiFIR). Overall, MiFID II aims at increasing market integrity, transparency and efficiency.
Package transactions are interlinked financial transactions comprising various instruments which firms execute jointly in order to reduce transaction costs and for risk management purposes. MiFIR’s pre-trade transparency regime requires the disclosure of trading interest in all non-equity instruments. However, national competent authorities will be able to waive this requirement if certain conditions are met. Unless there is a liquid market for the package order as a whole, the amended MiFID II also allows to waive the pre-trade transparency obligation.
ESMA’s draft RTS establish a methodology for determining those package orders for which there is a liquid market in the European Union as a whole, and which consequently may not be waived from pre-trade transparency requirements. The methodology ESMA is proposing is based on qualitative criteria which allows ESMA to take the characteristics of packages into account which are standardised and frequently traded. Based on this methodology, the following package orders would be considered to have a liquid market as a whole:
- Orders where at least one component is subject to the trading obligation(under MiFIR) and where all other components are subject to the clearing obligation under the European Market Infrastructure Regulation (EMIR); and
- Orders that meet a set of general criteria (all components are standardised; all derivative components can be cleared) plus a set of asset-class specific criteria.
Asset-class specific criteria have been developed for the following asset classes:
- interest rate derivatives;
- equity derivatives;
- credit derivatives; and
- commodity derivatives.
Packages in asset classes for which no asset-class specific criteria exist are considered not to have a liquid market as a whole.
ESMA is seeking stakeholders’ input to its draft RTS by 3 January 2017 and will use the feedback received to finalise the standards by February 2017. The MiFID II regime will enter into force on 3 January 2018.
CONSULTATION PAPER - DRAFT RTS ON PACKAGE ORDERS FOR WHICH THERE IS A LIQUID MARKET
2016-1562_CP_PACKAGE_ORDERS_MIFIR.PDF (782.55 KB)
REPLY FORM FOR CP ON DRAFT RTS ON PACKAGE ORDERS FOR WHICH THERE IS A LIQUID MARKET
Latest News from
Paradigm shift in the car industry23/02/2017 14:10:00
In its information report, The automotive industry on the brink of a new paradigm?, the EESC expects the GEAR 2030 High Level Groups and project teams to draw up an ambitious long-term industrial policy roadmap.
EU welcomes entry into force of the WTO Trade Facilitation Agreement23/02/2017 12:38:00
The Trade Facilitation Agreement (TFA) – the most significant multilateral trade deal concluded since the establishment of the World Trade Organisation (WTO) in 1995 – has entered into force.
Child-friendly justice: the child’s perspective22/02/2017 16:10:00
Children involved in court proceedings often feel scared, ignored, and ill-informed, as a new report from the European Union Agency for Fundamental Rights (FRA) shows. By asking children across different EU Member States about their experiences & views, this report shows how far we still have to go to make our justice systems child-friendly.
ESAs warn on money laundering &terrorist financing risks affecting the EU financial sector22/02/2017 14:25:00
The 3 European Supervisory Authorities (EBA, EIOPA and ESMA - ESAs) have published a Joint Opinion addressed to the EC on the risks of money laundering and terrorist financing affecting the EU's financial sector.
EC welcomes new rules to prevent tax avoidance through non-EU countries22/02/2017 13:10:00
The EC welcomes the agreement reached by ECOFIN on new rules to help prevent tax avoidance via non-EU countries, which will prohibit multinational companies from escaping corporate tax by exploiting differences between the tax systems of Member States and those of non-EU countries (so-called 'hybrid mismatches').