MiFIR introduces pre-trade and post-trade transparency requirements in respect of bonds, structured finance products, emission allowances and derivatives, subject to certain conditions and to certain waivers. In particular, Article 9(1)(e) of MiFIR provides for a waiver specific to package orders: under certain conditions, package orders can be granted a waiver from pre-trade transparency, but the use of that waiver is more limited when the package order is considered liquid.
Article 9(6) of MiFIR empowers the European Commission (Commission) to adopt, following a submission of a draft regulatory technical standard (RTS) by the European Securities and Markets Authority (ESMA), and in accordance with Articles 10 to 15 of Regulation No (EU) 1095/2010, a Delegated Regulation establishing a methodology for determining those package orders for which there is a liquid market.
The draft RTS was submitted to the Commission on 28 February 2017.
The Commission has now published the draft text of Commission Delegated Regulation (EU) No…/… of XXX supplementing MiFIR on markets in financial instruments with regard to package orders. The Delegated Regulation comprises the following:
- Article 1 sets out the general methodology for establishing for which package orders there is a liquid market as a whole; and
- Articles 2 to 5 specify the conditions under which a package order can fulfil the asset-specific criteria set out in Article 1(b), respectively for interest rate derivatives (Article 2), equity derivatives (Article 3), credit derivatives (Article 4) and commodity derivatives (Article 5).