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ESMA’s application of the trading obligation for shares following a no-deal Brexit

The European Securities and Markets Authority (ESMA) has published a statement on the impact on the MiFIR trading obligation for shares (TO) of the United Kingdom (UK) leaving the European Union (EU) on 29 March 2019 without a withdrawal agreement (no-deal Brexit), and without an equivalence decision for the UK by the European Commission (EC).

ESMA is issuing this statement in response to requests from many market participants for additional clarity and certainty on the application of the TO for shares in the absence of an equivalence decision by the EC.

ESMA recognises that its approach may lead to an overlap of trading obligations for a number of shares and potentially a greater level of fragmentation of trading should the UK apply an identical approach. However, the absence of any clarification by ESMA would by default lead to the application of the MiFIR TO to every share traded in the EU27. ESMA’s approach seeks to limit potential market disruption while also ensuring Article 23 MiFIR is adequately and consistently applied across the EU.

Reflecting these aspects, ESMA’s statement contains guidance on the application of the TO for shares in a no-deal Brexit scenario.  To effectively inform market participants, ESMA is publishing:

  • Public Statement – Impact of Brexit on the trading obligation for shares; and, 
  • List of ISINs – Following the approach outlined in the statement, the list of instruments which would be subject to the TO for shares.

ESMA wishes to highlight that the guidance provided in the public statement should only be applied in case of a no-deal Brexit occurring on 29 March 2019.

Next steps

Should the timing and conditions of Brexit change, ESMA may adjust its approach and inform the public of any changes as soon as possible.

Related Documents

Public Statement Trading Obligation Shares

ESMA70-155-7329 Public Statement Trading Obligation Shares.PDF (134.02 KB)


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