At the end of each month, the SAFE Regulatory Radar highlights a selection of important news and developments on financial regulation at the national and EU level.
MiFIR Review: Update of ESMA’s guidance under the MiFIR Review
On 16 October 2024, the European Securities and Markets Authority (ESMA) updated the Manual on post-trade transparency, to reflect the revisions of MiFID II/MiFIR as agreed upon by the co-legislators. The manual’s objective is to promote common approaches and practices in the areas of post-trade transparency and transparency calculations.
Notably, it further covers the different aspects of post-trade transparency for equity and non-equity instruments. It addresses the transparency calculations for equity and non-equity instruments, focusing inter alia on identifying instruments and transactions subject to post-trade transparency and addressing the obligation to report and publish post-trade transparency information.
Additionally, ESMA has accordingly updated its Opinion on the assessment of pre-trade transparency waivers for equity and non-equity instruments, focusing on pre-trade waivers in light of MiFIR review’s transitional provisions. Further guidance was provided by ESMA last March in its Public Statement on the Transition for the application of the MiFID II/MiFIR review.
By amending these acts, ESMA intends to ensure a smooth transition and consistent application of MiFIR, and complement the clarifications thereon previously provided in the Interactive Single Rulebook (ISRB).
On 17 October 2024, the Expert stakeholder group on equity and non‑equity market data quality and transmission protocols, published several reports covering bonds, shares, exchange-traded funds (ETFs) and derivatives. The group’s mandate established by the MiFIR reform is to provide advice to ESMA and the Commission on the quality and substance of market data and the quality of the transmission tool. While outlining the benefits of a structured framework for transparency, data quality and transmission protocols in the EU, such reports list several recommendations with the aim of making the development of consolidated tapes for bonds, shares, ETF and derivatives contribute to the success of the Savings and Investment Union.
MFA: Establishment of the Ukraine Loan Cooperation Mechanism and provision of exceptional macro-financial assistance (MFA) to Ukraine
On 24 October 2024, the European Parliament and the Council of the European Union adopted a regulation establishing the Ukraine Loan Cooperation Mechanism and providing exceptional macro-financial assistance to Ukraine.
The regulation’s objective is to support Ukraine’s economic resilience and reconstruction, enabling it to achieve a long-term recovery. The mechanism intends to employ resources from immobilized Russian assets and contributions from the Member States. The loan mechanisms aim to ensure financial support while promoting reforms and compliance with democratic standards, ultimately aiding Ukraine’s economic stability and EU integration.
Additionally, the regulation provides for conditionality and reform incentives in the fields of governance, anti-corruption and economic management, as well as the requirement for strict adherence to transparent reporting and financial oversight to ensure that the funds are allocated efficiently.
More information on Ukraine’s reconstruction after Russia’s attack can be found in the Frankfurt Report, published by SAFE and the Centre for Economic Policy Research (CEPR): “Ukraine’s Reconstruction: Policy Options for Building an Effective Financial Architecture.” The report addresses the precondition for the country’s reconstruction and development, i.e., a healthy and widely trusted financial system, and provides policy options for improving effectiveness and increasing international trust.
SIPS: Amendments to the regulation on oversight requirements for systemically important payment systems
On 18 October 2024, the European Central Bank (ECB) published its amendments to regulation No 795/2014 of 3 July 2014 on oversight requirements for systemically important payment systems (SIPS) to implement the principles and recommendations of the Committee on Payments and Market Infrastructures and the Technical Committee of the International Organization of Securities Commission.
The amendments primarily affect the criteria for identifying SIPS and clarify the requirements for SIPS operators’ branches. Additionally, the division of competence concerning oversight is clarified. Finally, the amended regulation introduces strengthened requirements for cyber resilience and managing risks related to outsourcing.
Updates:
- European Securities and Market Authority (ESMA):
- Q&A on the status of entities providing crypto-asset services as part of the grandfathering regime.
- Q&A on lot sizes and position limits.
- Q&A related to package orders/transactions
Public consultations
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Pietro Chiarelli is Financial Policy Analyst at the SAFE Policy Center.
