January 24, 2022

Volume XII, Number 24

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January 24, 2022

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ESMA Amends Opinions on Post-Trade Transparency and Position Limits for Third-Country Trading Venues

On December 15, 2017, the European Securities and Markets Authority (ESMA) revised two opinions providing guidance to investment firms on their post-trade transparency (Transparency Opinion) and position limits (Limits Opinion) obligations under the revised Markets in Financial Instruments Directive (MiFID II) and the Markets in Financial Instruments Regulation (MiFIR) when they transact on third-country trading venues.

The Opinions were initially published on May 31, 2017 (for further information on the Transparency Opinion, please see the Corporate & Financial Weekly Digest of June 2, 2017). The previous version of the Transparency Opinion specified that, subject to third-country trading venues meeting a set of criteria, investment firms trading on those trading venues would not be required to make transactions public in the EU. Equally, under the Limits Opinion, commodity derivatives contracts traded on qualifying third-country trading venues would not be considered economically equivalent over-the-counter (EEOTC) contracts for the purposes of the position limit regime. The original Opinions required ESMA to establish a list of such third-country trading venues benefitting from the relief.

The revised Opinions state that, pending an assessment by ESMA of more than 200 third-country trading venues under the criteria in the Opinions, transactions on third-country trading venues are not subject to post-trade transparency requirements nor will positions in commodity derivatives traded on those third-country venues be treated as potentially EEOTC contracts. ESMA has stated that it will carry out the determination of third-country trading venues and publish the results in the course of 2018.

The Transparency Opinion is available here and the Limits Opinion is available here.

©2022 Katten Muchin Rosenman LLPNational Law Review, Volume VIII, Number 5
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About this Author

Carolyn H. Jackson, International Attorney, Katten Muchin law firm
Partner

Carolyn Jackson is a partner in Katten Muchin Rosenman UK LLP and is a Registered Foreign Lawyer. She provides US financial regulatory legal advice to a broad range of market participants, including commercial banks, investment banks, investment managers, broker-dealers, electronic trading platforms, clearinghouses, trade associations and over-the-counter derivatives service providers.

Carolyn guides clients in the structuring and offering of complex securities, commodities and derivatives transactions and in complying with US securities and commodities laws...

+44 0 20 7776 7625
Nathaniel Lalone, Katten Muchin Law Firm, Financial Institutions Attorney
Senior Associate

Nathaniel Lalone, a partner at Katten Muchin Rosenman UK LLP, has a broad range of experience in the regulation of financial products and financial markets, and frequently provides regulatory and compliance advice to trading venues, clearing houses and buy-side firms active in the over-the-counter (OTC) derivatives, futures and securities markets. He is actively involved in advising clients on the implementation of MiFID 2 and MiFIR in the European Union as well as the international reach of US financial services regulation. He also has significant experience with structuring...

+44 0 20 7776 7629
Neil Robson, private equity fund managers counselor, Katten Law Firm, London
Partner

Neil Robson, a regulatory and compliance partner with Katten Muchin Rosenman LLP, focuses his practice on counseling hedge and private equity fund managers and other investment advisers on operational, regulatory and compliance issues. He regularly addresses Financial Conduct Authority (FCA) and EU authorization and compliance under both the EU Alternative Investment Fund Managers Directive (AIFM Directive) and MiFID, cross-border issues in the financial services sector, market abuse, anti-money laundering and regulatory capital requirements, formations and buyouts of...

44-0-20-7776-7666
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