ESMA launches bond liquidity system under MiFID II

MiFID Firms

Date: 04 May 2018

On 2nd May 2018, the European Securities and Markets Authority (ESMA) published its first liquidity assessment for bonds subject to the pre- and post-trade requirements of the Markets in Financial Instruments Directive (MiFID II) and Regulation (MiFIR). 

ESMA’s assessment of the European bond market for the first quarter of 2018 found 220 bonds (out of 71,000  for which the assessment was executed) to be sufficiently liquid to be subject to MiFID II’s real-time transparency requirements. The full list of liquid bonds is available through ESMA’s Financial Instruments Transparency System (FITRS).

Next steps
ESMA will update its bond market liquidity assessments quarterly. However, additional data and corrections submitted to ESMA may result in further updates within each quarter, published in FITRS (which shall be applicable the day following publication). The transparency requirements for bonds deemed liquid today will apply from 16 May 2018 to 15 August 2018, the date from which the next quarterly assessment, to be published on 1 August 2018, will become applicable. The transitional liquidity assessment for bond instruments (except ETCs and ETNs) will cease to apply from 16 May 2018.

ESMA, in cooperation with National Competent Authorities, will continue to address the data quality issues mentioned above, in close interaction with reporting entities. In addition, ESMA will work further on making the publication process more robust.