On 12 May 2021, the European Securities and Markets Authority (ESMA) issued a consultation paper seeking views from market participants on its MiFID II / MiFIR annual review report under Commission Delegated Regulation (EU) 2017/583 (RTS 2).
The consultation paper sets out ESMA’s assessment of the operation of the thresholds for the liquidity determination of bonds and the trade percentiles determining the pre-trade size specific to the financial instrument (SSTI) threshold which is subject to a four stage phase-in regime under RTS 2. In the consultation paper ESMA proposes to:
- Move to stage 3 for the liquidity assessment of bonds.
- Move to stage 3 for the SSTI percentile of bonds.
- Not to move to stage 2 for the SSTI percentile of non-equity instruments other than bonds.
The deadline for comments on the consultation paper is 11 June 2021.
ESMA will consider the feedback to the consultation paper and expects to publish a final report and submit, if necessary, regulatory technical standards (RTS) to the European Commission for endorsement in July 2021. Following such endorsement, the RTS are then subject to a non-objection procedure by the European Parliament and the Council.