July 22, 2018

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ESMA Publishes Updated Double Volume Cap Public Register

On April 10, the European Securities and Markets Authority (ESMA) published updated results of the double volume cap (DVC) mechanism on its website—for the period of March 1, 2017 to February 28, 2018, and for already published DVCs.

The DVC mechanism is set out in the Markets in Financial Instruments Regulation (MiFIR) and is designed to limit the amount of “dark” trading under certain equity waivers, meaning trading that relies on the reference price waiver and the negotiated transaction waiver to avoid MiFIR transparency requirements.

In the updated DVC mechanism data, the number of new breaches is 47 equities for the 8 percent cap—which applies to all trading venues—and 8 equities for the 4 percent cap, which only applies to individual trading venues.

ESMA has received corrections to past DVC publications from trading venues that render a limited number of historic breaches incorrect; suspensions in relation to trading of such instruments under the waivers should be lifted. Conversely, 83 new breaches of the 8 percent cap and 18 breaches of the 4 percent cap have been identified for the same period. Trading under the waivers for those instruments should be suspended from April 13 to October 13.

The updated public register regarding the DVC mechanism is available here.

ESMA’s announcement in relation to the updated DVC register is available here.

©2018 Katten Muchin Rosenman LLP

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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 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