Pre-trade transparency is an integral feature of MiFID. However, in order to ensure the liquidity and efficiency of equity markets, waivers allow a limited number of cases to deviate from MiFID's trade transparency requirements.
ESMA published a revision of its waiver document (ESMA/2011/241) which provides information on the pre-trade transparency of trading systems already set up in the European Union, and informs on the compliance of such systems with MiFID, the Markets in Financial Instruments Directive. ESMA compiles its waiver document in order to contribute to a level-playing field across the Union when it comes to the consistent application of such waivers.
Today’s update expands the scope of the document to pre-existing systems; it now includes the vast majority of EU operating systems and functionalities where an order which is sent to a Regulated Market (RM) or a Multilateral Trading Facility (MTF) is not subject to any pre-trade transparency, even where such a situation was not supported by an explicit waiver.
A total of 19 additional functionalities are now covered. However, not all revised pre-existing cases of limited pre-trade transparency were considered by ESMA as MiFID-compliant. In particular, two pre-existing functionalities were added to the list as ‘non-MiFID compliant’ systems. ESMA expects a timely adjustment of these non-MiFID compliant systems in order to ensure future compliance. ESMA will monitor such adjustments on an on-going basis and also continue to assess the compliance of new waivers in the future.
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