On 28 March 2022, the European Securities and Markets Authority (ESMA) published final reports that contained targeted amendments to Regulatory Technical Standards (RTS) 1 and 2 which specify the transparency requirements for equity and non-equity under the Markets in Financial Instruments Regulation (MiFIR).
The final report on RTS 1 (equity transparency) includes revisions to: large in scale, thresholds for exchange traded funds, the legal provisions relating to non-price forming transactions, the list of trading systems and of the pre-trade transparency requirements attached to those. Other technical amendments relate to the time of publication of transactions executed outside trading hours, the date of application of the ESMA transparency calculations and the calculation of the standard market sizes.
The final report on RTS 2 (non-equity transparency) includes revisions to: the list of trading systems, non-price forming transactions and the application dates of the transparency calculations. The ESMA also sets out limited proposals amending RTS 2 with respect to commodity derivatives. However, the majority of the proposals on commodity derivatives will be finalised in the future review of RTS 2 (see below).
The ESMA submitted both final reports to the European Commission on 28 March 2022. The Commission has three months to decide whether to endorse the proposed amendments to the RTS.
The final reports contain the first series of proposed amendments to address issues that have received broad support from stakeholders and/or are considered important in the context of establishing a consolidated tape provider. A second, and broader, review will be carried out following the MiFIR review which is currently under discussion. It will be focussing on the necessary changes of RTS 1 and 2 in consequence of the MiFIR review and also include an analysis of the proposals included in the ESMA consultation paper published in July 2021 but not covered in the final reports.