On 26 March 2018, the European Securities and Markets Authority (ESMA) published its final report on proposed amendments to Commission Delegated Regulation (EU) 2017/587 (RTS1) which details the transparency requirements for equity instruments, including the quoting obligations for systematic internalisers (SIs). The final report has been submitted to the European Commission (Commission). The Commission has three months to decide whether to endorse the proposed amendments to RTS 1.
Over recent months, ESMA identified that further clarification around the concept of “prices reflecting prevailing market conditions” might be required to avoid SIs benefitting from a competitive advantage compared to trading venues. ESMA has therefore decided to clarify that SI quotes should reflect the minimum price increments applicable to EU trading venues. This means that SIs’ quotes would only reflect prevailing market conditions where, for instruments subject to the tick size regime, those quotes reflect the minimum price increments applicable to on-venue orders and quotes.