ESMA proposes amendements to MiFIR on transactions reporting and best execution reporting
The European Securities and Markets Authority (ESMA), has published the Final Report on the review of transaction and reference data reporting obligations under MiFIR.
The final report contains recommendations and possible legislative amendments to MiFID II/MiFIR with a view to simplifying the current reporting regimes whilst ensuring quality and usability of the reported data. It aims to achieve this through:
- The replacement of the trading on a trading venue (TOTV) concept with the SI approach for OTC derivatives, taking into account the conclusions of ESMA’s Final Report on the transparency regime for non-equity instruments and the trading obligation for derivatives;
- The removal of the short sale indicator;
- The alignment with reporting regimes such as MAR, EMIR and the Benchmark Regulation;
- The reliance on international standards, including LEIs, ISINs and CFIs; and
- The inclusion of three additional data elements with a view to harmonise the way they are reported and avoid inconsistent and duplicative reporting of the same information at the national level. In particular, these are indicators for:
- Buyback programs;
- Information on MiFID II client categories; and
- Transactions pertaining to aggregated orders.
ESMA has also issued a Public Statement to promote coordinated action by National Competent Authorities (NCAs) under MiFID II. The statement relates to the temporary suspension of the obligation on execution venues to make available to the public data related to the quality of execution of transactions on their venues (RTS 27 Reports).
The Directive amending MiFID II, under the Capital Markets Recovery Package, states that these reports are rarely read and do not enable investors and other users to make any meaningful comparisons on the basis of the information they contain. Following the adoption of this Directive on 16 February 2021, ESMA and NCAs have observed a lack of clarity among market participants on the application date of the suspension of the obligation to publish RTS 27 reports.
ESMA therefore publishes this statement to provide clarity on the application date of the suspension. Moreover, in light of the rationale of the suspension, ESMA expects NCAs not to prioritise supervisory actions towards execution venues relating to the obligation to publish the RTS 27 reports, until the date on which the national transposition measures apply.