Pre-trade transparency waivers
On 28 September 2017, ESMA issued a public statement[1] regarding the joint work plan of ESMA and NCAs for opinions on MiFID II pre-trade transparency waivers. The statement explains that, while ESMA intends to finalise the opinions on equity waivers by the end of 2017, due to the high number and complexity of applications that need to be assessed, it is unlikely to be in a position to issue opinions on a majority of non-equity waiver notifications before 3 January 2018.
In light of ESMA’s clarification of its process, we will now communicate responses on complete non-equity waiver applications before the finalisation of ESMA opinions. Any waiver we communicate will take effect from 3 January 2018, and applicants should prepare on that basis. However, waivers may be subject to review once an ESMA opinion has been provided. If we decide to amend our response in light of that review, we will contact the affected applicant to discuss with them the period of time that would be reasonably practicable for them to adapt their rules, systems and processes in order to comply before we take any final decision.
ESMA also referred to applications that miss essential information required for a compliance assessment under MiFIR. The FCA conducts its own review of completeness before submitting to ESMA and will contact venues directly where we believe information is missing.
In relation to equity waiver applications, our plan remains to communicate decisions after finalisation of ESMA opinions.
Commodity position limits
In response to ESMA’s Work Plan for ESMA opinions on position limits, the FCA intends to start publishing in October position limits that will come into effect on 3 January 2018 on commodity derivatives contracts traded on UK trading venues.
In the event that we decide it is necessary to change these limits in the light of ESMA opinions, or as otherwise required under MIFID II, we will provide an appropriate notice period before the revised limit replaces the initial limit to allow market participants to adjust positions and, if eligible, apply for a hedging exemption.
The FCA’s work plan as detailed can also be found on our MiFID II webpage[2].