On 24 February 2021, the European Securities and Markets Authority (ESMA) published its second annual report on waivers and deferrals for non-equity instruments under MiFIR.
Articles 4(4) and 9(2) of the Markets in Financial Instruments Regulation (MiFIR) require ESMA to monitor the application of pre-trade transparency waivers 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 provides an analysis of the waivers for non-equity instruments for which ESMA issued an opinion to the Member State competent authorities between 1 January and 31 December 2019. It also provides an overview of the deferral regime for non-equity instruments applied across the different Member States.
In particular, the annual report notes that as far as pre-trade transparency waivers are concerned, the Netherlands submitted the largest number of waiver notifications in 2019. This reflects the establishment of subsidiaries of trading venues operating in the UK to the Netherlands in the context of Brexit. Among all notifications, 80% of the requests were split among the illiquid waiver (27%), the LIS waiver (24%), the OMF waiver (18%) and the SSTI waiver (11%). The non-equity waivers assessed related to a variety of non-equity instruments, but mainly bonds (19%), IR derivatives and equity derivatives (13% each), commodity derivatives (11%), and FX derivatives (9%). On the post-trade transparency side, deferrals for LIS transactions were commonly used across trading venues for the different types of non-equity instruments.
ESMA will publish the next annual reports in the second half of 2021 covering the analysis of the application of the waivers and deferral regimes in year 2020.