On 2 February 2021, the European Securities and Markets Authority (ESMA) published its Annual Report on the application of waivers and deferrals for equity instruments under MiFIR.
The basis for the Annual Report is Articles 4(4) and 9(2) of MiFIR which require ESMA to monitor the application of pre-trade transparency wavers and to submit an Annual Report to the European Commission on how equity and non-equity waivers are applied in practice. Articles 7(1) and 11(1) of MiFIR require ESMA to monitor the application of deferred trade-publication and to submit an annual report to the Commission on how they are used in practice.
The Annual Report now published includes an analysis based on waivers for equity and equity-like instruments for which ESMA issued an opinion to a Member State competent authority in the period between 1 January to 31 December 2019. It also includes an overview of the deferral regime for equity and equity-like instruments applied across different EU Member States.
The Annual Report notes that overall, the distribution of waiver types is similar to that of 2018 and the UK is the country that submitted the highest number of waiver notifications. The large-in-scale (LIS) waiver is the most used and shares are the instrument type for which waivers are requested most frequently. Similarly, the volume under the waivers, both in turnover and number of transactions, is for large part executed in shares. However, exchange traded funds are the instruments with the highest percentage of dark trading with respect to the overall volume traded in those instruments. Most of the turnover executed in the dark relates to the LIS waiver, while in terms of transactions the majority is executed under the reference price waiver.