Systematic Internaliser Regime
Last September, ESMA advanced the Systematic Internaliser (SI) regime under MiFID II by publishing EU wide data on equity, equity-like and bond instruments. As expected, this resulted in several new mid-tier banks and brokers emerging as SIs for a number of these instruments. With a large amount of pre and post-trade data still being analysed by the industry, it remains uncertain what impact this has had on the post-MiFID II market structure. Trading venues remain wary on what share of equity flow these sell-side entities may pick up in the coming years if they continue to grow in size.
The SI regime for derivatives was delayed until 1 February 2019. However, ESMA recently announced that publication of data for the remainder of the MiFID II asset classes will be delayed further "until at the latest 2020". Find out more about ESMA's delay of the derivatives quoting obligation here. If you are unsure what the implications of the SI regime are, please read this article.
It is impossible to ignore the fact that Brexit still seems to be looming, whether you believe it will go ahead or not.
Firms all over Europe are putting their contingency plans into effect as we grow worryingly close to B-Day with so little certainty. But what implication does this have on your regulatory obligations?
Whilst there remains uncertainty, regulators have been providing guidance on planning under each exit scenario. The FCA have put into place a temporary permissions regime for EEA firms passporting into the UK and have drafted their amendments to EU law which would undertake most of MiFID II into UK legislation.
In recent weeks there has been an increase in guidance around a ‘no-deal’ Brexit, with the FCA last week releasing details of where they may use transitional powers. ESMA has also published details of its preparations and announced it had agreed certain no-deal MOUs with the FCA and Bank of England, whilst continuing negotiations on others.
TRADEcho are striving to ensure that we can continue to fully support both UK and EEA market participants’ reporting obligations post-Brexit, regardless of the outcome.
In Q2 2018, the London Stock Exchange applied for APA license in the Netherlands for TRADEcho and anticipate regulatory approval in the very near future.
To complement this, the service has been upgraded in a number of ways to distinguish between UK and EEA market participants and cope with any change to reporting rules that may come with the UK’s exit from the EU. TRADEcho’s Brexit functionality is being delivered to UAT in two parts. The first went into UAT on 14 January. The second and final release will reach UAT on 4 March. Both releases will be released to production on Brexit weekend on 30 March.
Want to know more on how Brexit or TRADEcho’s upgrades will affect your firm? Read our Brexit Readiness pack on the client hub or ask a member of our team at firstname.lastname@example.org.
Market participants and regulators go head-to-head regarding periodic auctions and their benefit to the market: