October 21, 2019

October 21, 2019

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ESMA Provides Update on Assessment of Third-Country Trading Venues Under MiFID II and MiFIR

On December 20, the European Securities and Markets Authority (ESMA) published a press release providing an update on its assessment of third-country trading venues (TCTVs) for the purposes of post-trade transparency and position limits under the revised Markets in Financial Instruments Directive (MiFID II) and Markets in Financial Instruments Regulation (MIFIR).

In December 2017, ESMA published two revised opinions on TCTVs in the context of MiFID II/MiFIR clarifying that:

  • EU investment firms trading instruments within the scope of MiFID II on TCTVs meeting a certain set of criteria are not required to make transactions public in the EU; and
  • Commodity derivatives contracts traded on TCTVs meeting a certain set of criteria are not considered economically equivalent over-the-counter (EEOTC) contracts for the purposes of the position limit regime.

ESMA received requests to assess more than 200 TCTVs against the criteria set out in the opinions. ESMA states that it has not yet reviewed a sufficient number of TCTVs to publish a comprehensive list and that it is important for all TCTVs to receive the same treatment in order to maintain a level playing field. ESMA has therefore decided to delay publication of the lists until a more significant number of TCTVs have been assessed.

Consequently, pending the publication of the lists, EU investment firms are not required to make public their transactions concluded on TCTVs, and commodity derivatives contracts traded on TCTVs will not be considered EEOTC contracts.

The press release is available here

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About this Author

John Ahern, Financial Attorney, London, Katten Law Firm

John Ahern, partner at Katten Muchin Rosenman UK LLP and head of the London Financial Services group, focuses his practice on banking, financial services, UK and European financial markets, and related regulations. His background in private practice and as in-house counsel at a global investment bank provides him with perspective on the unique regulatory issues facing the wholesale and private banking sectors. John advises multilateral trading facilities, broker-dealers and banks on trading, clearing and settlement as well as custody of securities—both physical and...

+44 (0) 20 7770 5253
Carolyn H. Jackson, International Attorney, Katten Muchin law firm

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 and regulations. 

+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

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...