On 3 October 2018, the European Securities and Markets Authority (ESMA) published a speech, The state of implementation of MiFID II and preparing for Brexit, given by its chair, Steven Maijoor.

The first half of the speech focuses on MiFID II covering transparency, the double volume cap (DVC), trading obligation derivatives and systematic internalisers (SIs).

Among other things Mr Maijoor states that ESMA has concerns that some periodic auction systems may have been designed with the intention to circumvent the DVC regime. Given this, ESMA has carried out a fact-finding exercise on period auction trading systems to understand their features. It intends to publish in the coming months a call for evidence on this issue to gain further insight before concluding its analysis and considering whether further measures need to be put in place for these types of trading systems.

Mr Maijoor also refers to the proposal ESMA submitted to the European Commission earlier this year to ensure that quotes of SIs meet the tick size requirements. According to Mr Maijoor the Commission is in the process of endorsing this proposal, albeit for a slightly narrower scope of instruments which will further align the regulatory requirements applicable to SIs and trading venues.

The second part of the speech concerning Brexit is covered in a separate blog entry.