On September 3, the European Commission (EC) published a communication, dated August 10, in response to a proposal from the European Securities and Markets Authority (ESMA) regarding amendments to Delegated Regulation 2017/587, which sets out regulatory technical standards on transparency requirements for trading venues and investment firms regarding financial instruments (RTS 1), supplementing the Markets in Financial Instruments Regulation (MiFIR).
In March, final revised amendments to RTS 1 were submitted by the ESMA to the EC. The amendments attempted to clarify that, for financial instruments subject to the minimum tick size regime under the revised Markets in Financial Instruments Directive, systematic internalizer (SI) quotes would only be considered to reflect prevailing market conditions where those quotes reflect the price increments applicable to EU trading venues trading the same instruments.
In the communication, the EC explains that once specific amendments have been made, they will endorse the proposed and revised amendments to RTS 1.
The EC has explained that they made these revisions because of co-legislators failing to provide, when finalizing the text of MiFIR, that SI quotes would need to respect tick size increments and, consequently, regulatory technical standards cannot be used to address this point.
The EC’s communication is available here.