The European Securities and Markets Authority (ESMA) in April updated its Questions and Answers regarding market structures and transparency issues under the Market in Financial Instruments Directive (MiFID II) and Regulation (MiFIR).
The new Q&As provide clarification on topics including the determination of the turnover to be used for the average value of transactions (AVT) calculation; money market instruments (MMIs); the impact for systematic internalisers of an instrument changing liquidity status in between the systematic internaliser determination dates; the reporting of prime brokerage transactions; the quoting obligation for systematic internalisers in non-equity financial instruments; branches of third country firms operating as SI in the EU; and third-country trading venues’ access to an EU CCP.
ESMA also reviewed its published Q&As on market structures topics and deleted/amended four topics addressing issues pertaining to January 3, 2018, and the following 12 months. These included the identification and authorisation of HFT and algorithmic trading; the timing of notification for transitional arrangements under Article 35(5) of MiFIR; the timing and procedure of notification for temporary opt out under Article 36(5) of MiFIR; and the timing of application for transitional arrangements under Article 54(2) of MiFIR.
In addition, the Q&A clarifying how tick sizes should be determined for non-EU instruments was also deleted.
ESMA will continue to develop these Q&As in the coming months, and will review and update where required.