September 18, 2020

Volume X, Number 262

September 17, 2020

Subscribe to Latest Legal News and Analysis

September 16, 2020

Subscribe to Latest Legal News and Analysis

September 15, 2020

Subscribe to Latest Legal News and Analysis

ESMA Publishes Reports on MiFID II/MiFIR Transparency Regime & SFTR and EU CCPs Updates

ESMA Publishes Updates on SFTR and EU CCPs

On July 13, the European Securities and Markets Authority (ESMA) published the following updates:

  • a press release regarding the success of the first day of reporting under the Securities Financing Transactions Regulation (the Press Release); and

  • the results of its third stress test exercise regarding central counterparties (CCPs) in the European Union (EU), which confirmed the overall resilience of EU CCPs to common shocks and multiple defaults for credit, liquidity and concentration stress risks.

The Press Release is available here.

The Results are available here.

ESMA Publishes Reports on the MiFID II/MiFIR Transparency Regime

On July 16, the European Securities and Markets Authority (ESMA) published two reports that review the key provisions of the MiFID II/MiFIR transparency regime (the Reports).

The Reports put forward proposals to simplify the current complex transparency regime while aiming to improve the level of transparency available for market participants.

The first report relates to the transparency regime for equity instruments (the First Report) and its key proposals include:

  • restricting the use of the reference price waiver to larger orders for equity instruments;

  • increasing the minimum quoting obligations and a revised methodology for determining the standard market sizes relevant for quoting by systematic internalisers (SIs);

  • simplifying the double cap spending mechanism into a single volume cap and lower thresholds; and

  • clarifying the scope of the trading obligation specifically in relation to third-country shares.

The second report concerns pre-trade transparency obligations applicable to systematic internalisers in non-equity instruments (the Second Report). The noteworthy proposals in the Second Report are set out below:

  • maintaining the publication of the quotes by SIs in liquid non-equity instruments;

  • deleting the requirements to provide quotes to other clients and to enter into transactions with multiple clients; and

  • harmonizing the way in which SIs publish their quotes in equity and non-equity instruments.

The First Report is available here, and the Second Report is available here.

©2020 Katten Muchin Rosenman LLPNational Law Review, Volume X, Number 199


About this Author

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...

+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 and documentation relating to OTC derivatives and structured products.

Prior to joining Katten, Nathaniel was a member of the US Regulatory and the Derivatives and Structured Finance practices at Allen & Overy LLP.

+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...