On 10 July 2024, the European Securities and Markets Authority (ESMA) published its third consultation paper on the future technical standards and technical advice on revised MiFIR and MiFID II.

The final legislative amending texts of MiFID II and MiFIR were published in the Official Journal of the European Union on 8 March 2024 and entered into force on 28 March 2024. The amended texts require ESMA to develop new technical standards and amend those in force in several areas with different legislative deadlines. In addition, the changes in the MiFIR review require amendments to Commission Delegated Regulation 2017/567 on which ESMA intends to provide technical advice.

This third consultation paper contains proposals that amend the Level 2 provisions on equity transparency (Commission Delegated Regulation 2017/587 (RTS 1)) and proposed technical advice on Commission Delegated Regulation 2017/567. These are set out in sections 3 and 4 of the consultation paper and include changes to the definition of a liquid market for equity instruments (section 3.1), the specification of information to be disclosed for pre-trade transparency purposes, which is also of relevance for the equity consolidated tape (section 4.1) and the review of the pre-trade transparency requirements for systematic internalisers (SIs) (section 4.2), notably the calibration of two quoting sizes.

The consultation paper also contains amendments to the regulatory technical standards (RTS) specifying the provisions on the volume cap (Commission Delegated Regulation 2017/577 (RTS 3)) following the change in the MiFIR review from a Double to a Single Volume Cap (section 6).

Section 7 of the consultation paper proposes recast the RTS specifying the organisational requirements for trading venues (Commission Delegated Regulation 2017/584 (RTS 7)), focussing on the new mandate on circuit breakers and reflecting the changes stemming from DORA.

Section 8 contains draft RTS on the equity consolidated tape provider (CTP) in relation to input and output data and has been developed in parallel to the proposed amendments to the RTS on equity transparency to ensure alignment.

Finally, section 9 of the consultation paper contains flags to be used for the purposes of post-trade transparency for non-equity instruments in Commission Delegated Regulation 2017/583.

The deadline for comments on the consultation paper are:

  • 15 September 2024 for sections 3, 4, 8 and 9.
  • 15 October 2024 for sections 5, 6 and 7.

Based on responses and feedback received, ESMA will prepare a Final Report that will include the draft technical standards for submission to the European Commission (Commission). The technical advice (section 3), RTS 1 (section 4), the RTS on input / output data for CTPs (section 8) and the flags for RTS 2 (section 9) will be submitted by ESMA to the Commission by December 2024.

RTS 1 will be delivered three months in advance compared to the legal deadline to ensure full alignment between the transparency requirements with the CTP requirements and not put the selection procedure for the equity CTP at risk, as well as, to ensure clear requirements for the equity CTP applicants. The remaining mandates addressed in the consultation paper will be delivered as per the legal deadline in March 2025.