On 21 September 2018, the European Securities and Markets Authority (ESMA) published an opinion (the Opinion) on the European Commission’s (the Commission’s) revised proposal for amending Delegated Regulation (EU) 2017/587 (RTS 1). On 10 August 2018, the Commission endorsed, with amendments, ESMA’s proposal to amend RTS 1 to specify the concept of ‘prices reflecting prevailing market conditions’ and clarify that systematic internaliser’s quotes would only reflect prevailing market conditions where those quotes reflect the minimum price levels applicable to on-venue orders and quotes.
In the Opinion, ESMA remains of the view that its proposal would better meet the intent of the empowerment set out in article 14 of MiFIR. However, in consideration of the Commission’s arguments, and appreciating time constraints, ESMA agrees to the reformulation of article 10 of RTS 1 as set out in the Commission’s previous letter. ESMA is thus agreeing to limit the application of tick sizes to quotes of systematic internalisers for shares and depositary receipts. ESMA also agrees to the other amendments of the Commission that are of a technical nature and are not intended to change the substance of the ESMA proposals (these were not set out in the letter of 10 August 2018).