21 November 2022
MiFID – Secondary Markets
The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, today published its Annual Report on waivers and deferrals. In the report, ESMA provides a picture of the European trading landscape in 2021, encompassing the net effect of Brexit and the relocation process from the UK to the European Union (EU).
Trading under waivers and deferrals is significant in the EU, specifically for shares and interest rate derivatives. In addition, trading volumes, both in terms of total turnover and in the number of transactions, have significantly increased from 2020 to 2021 for equity instruments as a consequence of Brexit.
For the analysis on non-equity instruments, ESMA identified a number of significant issues in the data received via the ad-hoc data collection exercise. In light of this, the analysis of non-equity instruments is limited to the trading activity under waivers and deferrals. Taking note of these data quality issues, ESMA included a recommendation in the report to amend MiFIR to allow ESMA to request data on the use of waivers and deferrals via the Financial Instruments Transparency System (FITRS) also for non-equity instruments.
Finally, ESMA included other recommendations such as streamlining the current deferral regime via a targeted set of amendments, deleting the SSTI waiver and deferral for non-equity instruments, and increasing the pre- and post-trade transparency LIS threshold for Exchange-Traded Funds.
Next steps
The report will be submitted to the European Commission.
Source – ESMA published Annual Report on waivers and deferrals