02 May 2022

EBF Position paper – ESMA Consultation TV perimeter

 In general terms, we understand that ESMA’s intention is to provide more clarity on the concept of “multilateral system” i.e. one of the most important definitions in the MiFID 2 framework upon which the EU capital markets is currently structured, and to further harmonise the understanding of such concepts across the Union. However, having carefully read the analysis and proposals presented in the Draft Opinion, EBF members fear that ESMA will in fact achieve the opposite result. Indeed, several of the examples and figures included in the draft Opinion have left our members with a large number of new questions, worries and a significant level of legal uncertainty.

In more details:

• ESMA makes a very extensive interpretation of the definition of multilateral system that substantially differs from the wording of the level 1 text, i.e. suggesting that it shall no longer be a criteria that multiple trading interests should be able to interact within the system.
• From a CMU perspective it is very important to ensure that the MiFID II framework allows different types of trading to co-exist on EU capital markets in order to serve different clients’ needs.
• We would welcome further guidance on the definition of “trading system” and “market operator”. We believe that a trading system must be understood as a common set of rules to negotiate and conclude transactions on financial instruments, imposed by the market operator, to which all the participants in the system adhere without negotiation.
• In our view, a more cautious approach would be to let the market participants focus on the implementation of the amendments to the MiFID II and MiFIR and delay the issuance of level 3 opinion(s) until the market has adjusted to new and amended binding rules and not until then will it be possible to fully understand the impact of the proposals.

EBF

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