EUROPE: ESMA Updates Transparency and Position Limit Opinions

Thursday June 4 2020

The European Securities and Markets Authority (ESMA)  published updated opinions on post-trade transparency and position limits under MiFID II and MiFIR following its assessment of over 200 third-country trading venues (TCTV) against criteria published in opinions in 2017.

Following the publication of the opinions in 2017 ESMA received requests to assess more than 200 TCTVs against the criteria set out in these opinions. It has now finalised the review of the information provided by TCTVs for which the assessment is expected to be relevant, and is publishing:

• an updated opinion related to post-trade transparency and its annex with the list of venues with a positive or partially positive assessment; and
• an updated opinion related to position limits and its annex with the list of venues with a positive assessment.

Opinion on post-trade transparency

The annex to the opinion on post-trade transparency includes a list of 136 venues from 25 countries. Most have a positive assessment for all the instruments available on the venue, while several have a partially positive assessment, i.e. a positive assessment which is limited to a subset of instruments. The instruments for which the assessment is not positive are specified in the excel file.

Investment firms concluding transactions on TCTVs absent from the list should make those transactions post-trade transparent via an approved publication arrangement (APA) by 3 October 2020. Investment firms are subject to the same obligation for transactions executed on TCTVs with a partially positive assessment, only for instruments exempted from the positive assessment.

Opinion on position limits

The annex to the opinion on position limits includes a list of 7 venues from 4 countries. All venues on that list have a fully positive assessment. So, commodity derivatives traded on venues included on that list should be not be considered as economically equivalent OTC contracts for the purpose of the position limits regime.

The publication of those updated opinions and related lists of venues is the outcome of a fruitful cooperation between relevant third-country trading venues, their competent authorities, EU competent authorities and ESMA. On the basis of an initial list of trading venues provided by EU market participants, ESMA has collected and analysed information allowing for the assessment of each venue against the criteria described in the opinions. The assessments have been approved individually by ESMA prior to inclusion on the general lists.

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