On 19th December 2016, the European Securities and Markets Authority (ESMA) updated two Questions and Answers documents  regarding implementation issues relating to transparency topics and market structures topics under the Market in Financial Instruments Directive and Regulation (MiFID II/ MiFIR).

Transparency

The new MiFID II transparency regime, which requires trading venues to make public bid and offer prices and depth of trading interest unless granted a waiver, applies from 3 January 2018. To obtain a waiver, trading venues must submit the application to the relevant national competent authority (NCA) and the NCA, where it considers the application is MiFIR compliant, will submit it to ESMA for an Opinion.

The updated Q&A document sets out the waiver application schedule for 2017 in order for competent authorities and ESMA to handle applications in time for 3 January 2018. The waivers will be processed in two tranches: 

Equity and Equity-like instruments:

• Trading venues submit waivers to NCAs by 1 February 2017
• NCAs submit waivers to ESMA by 28 February 2017
• ESMA review completed by 31 May 2017

Bonds and Derivatives:

• Trading venues submit waivers to NCAs by 1 June 2017
• NCAs submit waivers to ESMA by 31 July 2017
• ESMA review completed by 30 November 2017

Waivers submitted by trading venues after the above dates will be processed on a best effort basis. The updated Q&A document also clarifies the conditions when existing waivers for shares require a new waiver application.

Market Structures

ESMA has also updated its Q&A document on market structures with new questions on the topics of algorithmic trading and the mandatory tick size regime.

Future work

The purpose of these Q&A documents is to promote common supervisory approaches and practices in the application of MiFID II/MiFIR and its implementing measures. ESMA will continue to develop these Q&As in the coming months, both adding questions and answers to the topics already covered and introducing new sections not yet addressed.