05/06/2019

ESMA UPDATES ITS Q&AS ON TRANSPARENCY AND IN PARTICULAR THE SYSTEMATIC INTERNALISER REGIME

On Monday ESMA updated its Q&A on Transparency issues.  The updates sought to provide further clarification on the systematic Internaliser (SI) regime.  In particular:

1. Firms can be an SI in non-TOTV instruments via the mandatory calculation method or via opting in to SI status.

2. When opting in a firm can do this at the level of individual instrument and is not bound to opt in at a higher level e.g. sub-class in derivatives.

3. Quoting is only required where the instrument is TOTV, but SIs must monitor where non-TOTV instruments become TOTV as this can introduce the obligation to quote.

TRADEcho’s participation in the SI Registry allows SIs to submit their SI status to TRADEcho which is then updated in the Registry for all subscribers to receive.  TRADEcho’s Smart Report Router (SRR) uses the data from the SI Registry to determine who is responsible for making a trade public minimising the risk of over / under reporting. 

Any non-SI firm can subscribe to the SI Registry data for other uses such as pre-trade visibility on SIs at an individual instrument level or validation/audit of reporting for internal compliance purposes.

The SI Registry data is available to subscribe to via Smartstream RDU.