On May 31, the European Securities and Markets Authority (ESMA) published an opinion (Opinion) regarding whether third-country trading venues are within scope of the post-trade transparency regime of the Markets in Financial Instruments Regulation (MiFIR).

ESMA believes that information on transactions concluded by EU investment firms that are truly OTC, i.e., bilateral transactions with non-EU firms, or that are concluded on third-country trading venues that would not be subject to a certain level of post-trade transparency, should be made public in the EU through an approved publication arrangement (APA), as set out in Articles 20 and 21 of the MiFIR .

The Opinion states therefore, that, for the purposes of the post-trade transparency requirements of the MiFIR, EU investment firms should not be required to publish information about transactions that are concluded on a third-country trading venue that meets the following criteria:

  • It operates a multilateral system, i.e., a system or facility in which multiple third-party buying and selling interests in financial instruments are able to interact;
  • It is subject to authorization in accordance with the legal and supervisory framework of the third-country;
  • It is subject to supervision and enforcement on an ongoing basis in accordance with the legal and supervisory framework of the third country by a competent authority that is a full signatory to the IOSCO Multilateral Memorandum of Understanding Concerning Consultation and Cooperation and the Exchange of Information; and,
  • It has a post-trade transparency regime in place, which ensures that transactions concluded on that trading venue are published as soon as possible after the transaction was executed or, in clearly defined situations, after a deferral period.

ESMA will publish a list of trading venues that meet the above criteria, published as an annex to the Opinion, which will be updated on an ongoing basis.

The Opinion is available here.