Letter to ESMA in Response to MiFID/MiFIR Consultation on Equity Transparency Regime

MFA submitted a letter to ESMA in response to its MiFID/MiFIR consultation papers on the transparency regime for equity and equity-like instruments, and on systematic internalisers in non-equity instruments. In the letter, we make the following recommendations to ESMA:

  • Pre-Trade Transparency Requirements for Equities – We recommend that ESMA not reduce the available pre-trade transparency waivers (or otherwise amend the application of the waivers) at this stage.
  • Double Volume Cap – We explain that, of the options to amend the DVC as suggested by ESMA (and on the assumption that the availability of the RP and NT waivers are retained), we support the proposal to eliminate the 4% trading venue level threshold and keep the EU level threshold at 8%.
  • Share Trading Obligation – We support the exclusion of third country shares from the scope of the share trading obligation. Of the proposed alternative approaches to identifying third country shares, we support the ISIN approach as it would have the benefit of simplicity and is likely to be the most effective.
  • Ability to Trade In-Scope Shares with SIs – We explain that while we support the aim to reduce market fragmentation, we do not support the proposal to remove the ability for firms to trade shares that are in-scope of the share trading obligation on SIs. The ability to directly purchase shares from an SI, rather than on a trading venue, adds optionality to the manner in which a firm may execute its trades.