On July 16, the European Securities and Markets Authority (ESMA) published two reports that review the key provisions of the MiFID II/MiFIR transparency regime (the Reports).

The Reports put forward proposals to simplify the current complex transparency regime while aiming to improve the level of transparency available for market participants.

The first report relates to the transparency regime for equity instruments (the First Report) and its key proposals include:

  • restricting the use of the reference price waiver to larger orders for equity instruments;
  • increasing the minimum quoting obligations and a revised methodology for determining the standard market sizes relevant for quoting by systematic internalisers (SIs);
  • simplifying the double cap spending mechanism into a single volume cap and lower thresholds; and
  • clarifying the scope of the trading obligation specifically in relation to third-country shares.

The second report concerns pre-trade transparency obligations applicable to systematic internalisers in non-equity instruments (the Second Report). The noteworthy proposals in the Second Report are set out below:

  • maintaining the publication of the quotes by SIs in liquid non-equity instruments;
  • deleting the requirements to provide quotes to other clients and to enter into transactions with multiple clients; and
  • harmonizing the way in which SIs publish their quotes in equity and non-equity instruments.

The First Report is available here, and the Second Report is available here.