On 11 October 2018, the European Securities and Markets Authority (ESMA) published the following decisions from its board of supervisors:
- Decision of the Board of Supervisors on delegation to the ESMA chair of the assessment regarding third country trading venues for the purposes of Articles 57(4) of MiFID; and
- Decisions of the Board of Supervisors on delegation to the ESMA chair of the assessment regarding third country trading venues for the purposes of Articles 20 and 21 of MiFIR.
The decisions now published transfer to the ESMA chair responsibility for non-controversial assessments of third country trading venues. The decisions set out the criteria the ESMA chair will use when assessing whether to consider a third country entity as a trading venue for the purposes of Articles 20 and 21 of MiFIR or Article 57(4) of MiFID II. The ESMA board of supervisors retains responsibility for controversial assessments of third country trading venues.
Last year ESMA published opinions that addressed the treatment of transactions executed by EU investment firms on third country trading venues, for post-trade transparency under MiFIR, and the treatment of positions held in contracts traded on those venues for the position limit regime under MiFID II (our blog is here). In the opinion on post trade transparency ESMA considered that for the purposes of Articles 20 and 21 of MiFIR EU investment firms should not be required to publish information about transactions that are concluded on third-country trading venues that met the criteria set out in the opinion through an approved publication arrangement. In the opinion on position limits ESMA considered that for the purposes of Article 57 of MiFID II, commodity derivatives traded on third country trading venues that met the criteria in the opinion should not be considered as over-the-counter trades.