European Securities and Markets Authority publishes final report on equity transparency under revised Markets in Financial Instruments Directive

The European Securities and Markets Authority has published a final report, setting out proposals for amendments related to equity transparency under the revised Markets in Financial Instruments Directive. The report includes proposals for the amendment of the regulatory technical standards as well as the technical advice on the provisions on equity transparency, covering: (i) changes to the definition of a liquid market for equity instruments. The new liquidity assessment for shares is now solely based on the market capitalization instead of the free-float; (ii) specification of information to be disclosed for pre-trade transparency purposes, which is also of relevance for the equity consolidated tape; (iii) review of the pre-trade transparency requirements for systematic internalizers, including the calibration of two quoting sizes; and (iv) post-trade transparency reports, including flags for equity instruments. In addition, the proposals include changes related to the discontinuation of reporting of data for the purpose of transparency calculations. Going forward, ESMA will perform these calculations using transaction data reported under Article 26 of MiFIR.

The final report has been submitted to the EC, which has three months to decide whether to endorse the proposed amendments to the RTS. Similar amendments will be proposed in early 2025 for the volume cap mechanism.

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