MAD/MAR - MIFID II: ESMA Final Technical Standards

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MIFID II: ESMA Final technical standards

September 2015

The new rules, once implemented, will bring the majority of non-equity products into a robust regulatory regime and move a significant part of OTC trading onto regulated platforms. The key rules introduce:

Fairer, safer and more efficient markets

  • tests to determine whether a non-financial firm’s speculative investment activities are so great that it should be subject to MiFID II;
  • ranges for the new EU-wide commodity derivatives position limits regime;
  • rules governing high-frequency-trading, imposing a strict set of organisational requirements on investment firms and trading venues;
  • provisions regulating the non-discriminatory access to central counterparties (CCPs), trading venues and benchmarks, designed to increase competition;
  • provisions requiring trading venues to offer disaggregated data on a reasonable commercial basis;

Greater transparency

  • thresholds for the pre- and post-trade transparency regimes extended to equity-like instruments, bonds, derivatives, structured finance products and emission allowances;
  • a newly introduced liquidity assessment for non-equity instruments;
  • a newly-introduced trading obligation for shares and certain derivatives to be traded only on regulated platforms and, in the case of shares, systematic internalisers, instead of over-the-counter;
  • a double volume cap mechanism to limit dark trading and reshape the use of waivers for shares and equity-like instruments;
  • newly introduced reporting requirements for commodity derivatives; and

Stronger investor protection

  • improved disclosure to strengthen the best execution regime.
MiFID II
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