On 27 March 2024, the European Commission (Commission) published a draft interpretive notice to provide clarity to market participants on the transitional provision of the MiFIR review.

Background

MiFIR contains provisions to ensure that EU markets in financial instruments are more transparent, work more efficiently and provide investors with an adequate level of protection. Regulation (EU) 2024/791 of the European Parliament and of the Council of 28 February 2024 (the MiFIR review) amends MiFIR as regards enhancing data transparency, removing obstacles to the emergence of consolidated tapes, optimising the trading obligations and prohibiting receiving payment for order flow. It will enter into force on 28 March 2024 and will apply as of that date.

Communication of the Commission

Several provisions in the MiFIR review need to be supplemented by Commission delegated regulations which need to become fully operational. To ensure legal certainty for market participants until the new delegated regulations enter into application, the Commission states it is necessary to clarify the interpretation and implementation of the transitional provision laid down in Article 54(3) of MiFIR as amended by Article 1(47)(b) of the MiFIR review. The Commission is therefore called upon to approve the content of a draft Commission Notice on the interpretation and implementation of the transitional provision laid down in the MiFIR review. As such, publication of the draft Commission Notice will provide guidance on the transitional arrangement contained in Article 54(3) MiFIR. The Commission Notice provides that, pursuant to Article 54(3) MiFIR, the existing Commission delegated regulations, as applicable before 28 March 2024, continue to apply, together with the provisions that they supplement, in all cases where the MiFIR provisions are to be supplemented by new or amended Commission delegated regulations to become fully operational and cannot be supplemented adequately by the existing Commission delegated regulations only.

Draft Commission Notice

The text of the draft Commission Notice is enclosed as an Annex to the Communication. It identifies the following areas:

  • The volume cap mechanism (Article 5 MiFIR).
  • Deferred publication of the details of transactions in respect of bonds, structured finance products or emission allowances and deferred publication of the details of transactions in respect of derivatives (Articles 11 and 11a MiFIR).
  • Obligation to make pre-trade and post-trade data available on a reasonable commercial basis (Article 13 MiFIR).
  • Quotation rules for systematic internalisers in equity instruments (Article 14 MiFIR).
  • The obligation to report transactions (Article 26 MiFIR).