13 May 2022

ESMA's Ross: ISDA keynote speech – ESMA’s priorities for transparency

Today I want to share with you some thoughts on the multifaceted conceptof transparency and how appropriately calibrated transparencyrequirements contribute to better market functioning.

It is a pleasure to speak at this year’s ISDA Annual General meeting. I’m
sorry I cannot be with you in person due to conflicting agendas but it’s
good to see that the Annual general meeting is taking place again in
person. We are moving back into more normal times it seems, at least
when it comes to the sanitary situation, even if other concerns have
emerged over the last few months to capture our attention.

Today I want to share with you some thoughts on the multifaceted concept
of transparency and how appropriately calibrated transparency
requirements contribute to better market functioning. ESMA plays a key
role in this respect both via its single rulebook work but also when carrying
out its responsibilities of monitoring markets and contributing to
convergent supervisory practices.

Drawing on ESMA’s recent work, I will be focussing in particular on three
areas to highlight how transparency can contribute to better market
functioning:
• the non-equity transparency regime of MiFIR with a focus on
derivatives;
• enhancing transparency through new technologies; and
• transparency in the EU carbon market and beyond MiFIR review and derivative transparency

Let me first start with what can be considered the cornerstone of
transparency on EU markets, the MiFID II/MiFIR regime. After four years
of application, it was important to take a critical look at the regime, to
identify what has worked well and what can be further improved.
ESMA undertook an extensive review of MiFID II/MiFIR over the course of
2019 to 2021 resulting in the delivery of twelve reports to the European
Commission covering the whole scope of the provisions and, notably, the
MiFIR transparency regime.

ESMA’s review followed two main objectives
(i) assessing whether the provisions have delivered on their objectives and
(ii) proposing the necessary targeted amendments, both at Level 1 and
level 2. Our main takeaway from this review in the area of transparency is
that while some progress has been made, MiFIR did not fully deliver on its
ambitions. ESMA therefore made some recommendations such as
replacing some of the overly complex rules with streamlined and more
effective provisions. Moreover, we also recommended the establishment
of a consolidated tape, in particular for shares and bonds.

Following the ESMA review, the Commission published in November 2021
its proposal for the MiFIR review. The proposals picked up on a number
of recommendations highlighted in our review reports. As you are all
aware, considerations by the co-legislators of these proposals are still on-
going and we hence don’t know yet what the amended Regulation will look
like. I would still like to share with you some thoughts on two of the
proposed amendments which I know are of particular interest to you: the
transparency requirements for non-equity instruments and the
consolidated tape.

Firstly, pre- and post-trade transparency for non-equity instruments. As
you know, the Commission’s proposal focusses in particular on removing
the complexity of the deferral regime for post-trade transparency.
Following an ESMA recommendation, the Commission notably proposed
deleting the Size Specific to the Instrument (SSTI) threshold for both the

pre-trade and the post-trade transparency requirements...

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