ESMA clarifies Trading on a Traded Venue under MiFID II

The European Securities and Markets Authority (ESMA) has issued today an opinion regarding the implementation of the Markets in Financial Instruments Directive (MiFID II) and Regulation (MiFIR).

The opinion clarifies the concept of “traded on a trading venue” (TOTV), which is relevant for a number of provisions under MIFID II and MiFIR.

The concept of TOTV is in particular relevant for:

  • pre-trade and post-trade transparency requirements on market operators and investment firms operating a trading venue as well as for investment firms (including systematic internalisers) operating over-the-counter (OTC); and
  • transaction reporting obligations.

The ESMA opinion clarifies the concept of TOTV for OTC derivatives, and in particular which transactions in derivatives concluded outside of trading venues are subject to the transaction reporting and transparency requirements.  ESMA specifies that only OTC-derivatives sharing the same reference data details as derivatives for which trading venues submitted reference data should be subject to the MiFIR transparency and transaction reporting requirements.

ESMA’s opinion helps building a common supervisory culture and consistent supervisory practices among national supervisors, as well as ensuring uniform procedures and consistent approaches throughout the European Union.

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