Â鶹´«Ã½

Home   News   Features   Interviews   Magazine Archive   Symposium   Industry Awards  
Subscribe
Â鶹´«Ã½
Leading the Way

Global Â鶹´«Ã½ Finance News and Commentary
≔ Menu
Â鶹´«Ã½
Leading the Way

Global Â鶹´«Ã½ Finance News and Commentary
News by section
Subscribe
⨂ Close
  1. Home
  2. Industry news
  3. No-deal Brexit may disrupt ESMA’s MiFID thresholds
Industry news

No-deal Brexit may disrupt ESMA’s MiFID thresholds


14 February 2019 Brussels
Reporter: Maddie Saghir

Generic business image for news article
Image: Shutterstock
A no-deal Brexit may have some significant effects on the thresholds set by European Â鶹´«Ã½ Markets Authority (ESMA) in implementing measures of the second Markets in Financial Instruments Directive (MiFID II), Steven Maijoor, chair of ESMA, noted.

In his speech at the European Financial Forum 2019 in Dublin, Maijoor said: “I appreciate that some of the MiFID II thresholds may need recalibration in the new EU27 Environment.â€

“However, this is something ESMA will look at once there is more clarity about a future relationship with the UK and once the effect of, for instance, UK trading venues setting up subsidiaries in the EU27 on overall liquidity has become clearer.â€

Maijoor had also explained that the MiFID II transparency framework is founded on a number of thresholds to be specified at ESMA level, to introduce a transparent regime for trading all types of asset classes on a level playing field in the Union.

“One specific example is the double volume cap, which limits the share of trading in dark pools and is meant to preserve the quality of the price discovery mechanism in EU markets.â€

According to Maijoor, a no-deal Brexit will not only result in UK market participants losing their passports for accessing the EU, but there will be no further legal basis for the current extensive and granular daily data reporting from the UK to ESMA’s systems under MiFID II.

Maijoor added that in no-deal Brexit, from that date, no new UK data will be collected by ESMA.

He commented: “We also have to consider how UK data submitted before the Brexit date should be treated for future calculations.â€

“To provide clarity to market participants, we have explained in a public statement last week that in general, we will gradually phase out the UK data over time.â€

“For the double volume cap example, this means that UK data will remain part of ESMA’s calculations for a period of twelve months but its impact will gradually decrease as time passes.â€

“We are aware that this is not a perfect solution but we believe it is the least disruptive and most certain for the market in a situation which does not allow for perfect solutions.â€
NO FEE, NO RISK
100% ON RETURNS If you invest in only one securities finance news source this year, make sure it is your free subscription to Â鶹´«Ã½ Finance Times
Advertisement
Subscribe today
Knowledge base

Explore our extensive directory to find all the essential contacts you need

Visit our directory →
Glossary terms in this article
→ Liquidity

Discover definitions, explanations and related news articles in our glossary

Visit our glossary →