EU: Updates to MiFIR:

post-reform changes on RCB, liquid markets for equity instruments, and PTRR

 

The EU Commission is consulting a delegated act amending MiFIR.

Regulation (EU) No 600/2014 (MiFIR) sets out the rules for trading in the EU. Its latest amendments, introduced through Regulation (EU) 2024/791 (the MiFIR review), removed key barriers to establishing three consolidated tapes (CTs) — one each for bonds, shares and exchange-traded funds (ETFs), and over-the-counter derivatives. The review also strengthened transparency and improved the EU market’s competitiveness globally.

Since Directive 2014/65/EU (MiFID II) also contains provisions on CTs and transparency, it was amended in parallel by Directive (EU) 2024/790. Both amendments were published in the Official Journal on 8 March 2024 and took effect on 28 March 2024.

Regulation (EU) 2017/567 now needs to be updated to align with the changes to MiFIR and MiFID II, with the following objectives:

• Liquidity assessment – Replace the ‘free float’ criterion with ‘market capitalisation’ when defining a ‘liquid market’ for Articles 4, 5, and 14 MiFIR, and clarify certain aspects of equity instrument liquidity assessment.
• Reasonable commercial basis – Remove existing definitions for trading venues and systematic internalisers, reflecting changes to Article 13 MiFIR and granting ESMA power to set regulatory technical standards.
• Size-specific thresholds for non-equities – Delete provisions setting size-specific thresholds for systematic internalisers, following the removal of pre-trade transparency requirements for non-equity instruments.
• Post-trade risk reduction (PTRR) – Define what qualifies as PTRR services under Article 31(1) MiFIR, without prejudice to future updates under Article 31(4) after ESMA’s technical advice.
• Portfolio compression publication – Remove the requirement for public reporting of portfolio compression transactions, following the deletion of related MiFIR obligations.