• ESMA published MiFID II/MiFIR Annual review report under EC reg 2017/583 (RTS 2).
• Follows ESMA May 2021 sought input on RTS 2 annual review report.

Recommendations

• ESMA suggests to the European Commission to move to stage 3 for the average daily number of trades threshold, as used for the quarterly liquidity assessment of bonds.
• Move to stage 3 for pre-trade size specific to threshold for bonds; and not to move to stage 2 for pre-trade size specific to threshold for other non-equity instruments.
• Completeness and quality of data still insufficient to do annual transparency calculation in 2020 for some instrument classes, and thus premature to move to the next stage.
• The proposals to move to stage 3 are expected to improve the currently limited pre- and post-trade transparency available to market participants in the bond market.

Next Steps

• Covers mandate whereby ESMA is required to analyze whether it is appropriate to move to following stage of phase-in for transparency requirements for the following.
• Average daily number of trades threshold used for the quarterly liquidity assessment of bonds; and the trade percentile used for determining the pre-trade size specific to the instrument thresholds for bonds and other non-equity instruments.
• In light of assessment undertaken and the conclusions reached, ESMA has prepared an amended version of the applicable regulatory technical standards as foreseen in RTS 2.
• Before moving to stage 3, EC has to endorse amended regulatory technical standards.
• After endorsement, they will be subject to non-objection procedure by EP and Council.