ESMA issues second statement on the transition for the application of the MiFID II/MiFIR review

The European Securities Markets Authority (ESMA) has issued a second public statement providing transitional guidance on the application of revised provisions under the Markets in Financial Instruments Directive II (MiFID II) and Markets in Financial Instruments Regulation (MiFIR) review. Key updates include the extension of position management controls to derivatives on emission allowances, a new weekly position reporting obligation for trading venues options and the removal of the quantitative test for Systematic Internaliser designation. The single volume cap mechanism (VCM) has now replaced the previous double VCM, with the first calculation results published on 9 October. Revised transparency rules for bonds, structured finance products, emission allowances and equity instruments will apply from 2 March 2026, with certain RTS 1 provision taking effect 20 days post-publication in the Official Journal of the EU.

ESMA has also announced the discontinuation of the Financial Instruments Transparency System and Double VCM System reporting flows, aligning with its broader efforts to reduce regulatory burdens. Market participants are advised to prepare for these changes, unless advised otherwise, notwithstanding potential changes in the timing for the adoption of delegated and implementing acts by the European Commission and should consult ESMA's technical documentation and Q&A tools for further guidance. ESMA has also published an amended version of its manual on pre-trade and post-trade transparency under MiFID II and MiFIR, marked-up with the relevant changes. The update includes two new sections: (i) section 6 dealing with pre-trade transparency for equity instruments; and (ii) section 7 dealing with the input/output data reported to/transmitted by the consolidated tape provider.

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