Pre- and post-trading transparency

Extension of the transparency regime: New financial instruments and trading venues

Transparency regime applicable to shares and similar instruments

Pre-trading transparency

• Scope of the obligation. Bid and offer prices, as well as the depth of trading interests, shall be made public. This obligation shall be calibrated for the different trading venues and the actionable indications of interest shall also be made public.
• Pre-trade transparency waivers and limitations on those waivers.
  • Procedure for authorisation: MiFID II-MIFIR recognises the possibility for trading venues to apply to the competent authority for waivers from the general pre-trade transparency obligation in the event of certain circumstances provided for in the regulations. The new legislation provides that prior to the authorisation of the implementation of a waiver by the competent authority, ESMA will issue a non-binding opinion on the compatibility of the waiver with the legislation.
  • Types of pre-trade transparency waivers: the types of waivers that may be granted include the following:
    • Waivers for systems that match orders to referenced prices.
    • Waivers for systems that formalise negotiated transactions.
    • Waivers for orders that are large in scale.
    • Waivers on orders pending disclosure introduced through an order management facility.
  • Mechanism for restricting the volume of trading benefiting from the waivers (Double Volume Cap): the new regulatory framework introduces a double limitation on the use of certain waivers, depending on the volume of trading of the financial instrument, in the trading venue itself (4%) and at European level (8%). In particular, this mechanism concerns those waivers granted to trading venues that operate with referenced prices and those that allow the formalisation of certain types of negotiated transactions.

Post-trade transparency. Authorisation for deferred publication

• Scope of the obligation. The price, volume and time of execution of the transactions executed shall be made public as soon as technically posible.
• Authorisation for deferred publication. MiFID II-MiFIR allows the possibility for the competent authorities to authorise in their jurisdiction the deferral of the publication of the transaction details depending on the liquidity of the instrument, the size of the transaction and when it has taken place.

Transparency regime applicable to instruments other than shares and similar instruments

Pre-trade transparency

• Scope of the obligation. Bid and offer prices as well as the depth of trading interests shall be made public. This obligation shall be calibrated for the different trading venues and the actionable indications of interest shall also be made public.
• Pre-trade transparency waivers:
  • Procedure for authorisation: MiFID II-MIFIR recognises the possibility for trading venues to apply to the competent authority for waivers from the general pre-trade transparency obligation in the event of certain circumstances provided for in the regulations. The new legislation provides that prior to the authorisation of the implementation of a waiver by the competent authority, ESMA will issue a non-binding opinion on the compatibility of the waiver with the legislation.
  • Types of pre-trade transparency waivers: the types of waivers that may be granted include the following:
    • Waivers for large-in-scale orders or pending disclosure in order management systems;
    • Waivers for actionable indications of interest in request for quote (RFQ) or live voice trading systems where a specified volume is exceeded, and
    • Waivers for instruments that do not have a liquid market.

Post-trade transparency. Authorisation for deferred publication

• Scope of the obligation. The post-trade transparency obligation requires the price, volume and time of execution of the transactions to be made public as soon as technically possible, with a maximum delay of 15 minutes (5 minutes as from 2021).
• Authorisation for deferred publication. MiFID II-MiFIR allows the possibility for the competent authorities in their jurisdiction to authorise deferral of the publication of the data in the following types of transactions:
  • Large-in-scale transactions for the instrument or category of instrument concerned;
  • Transactions related to a financial instrument or category of financial instruments for which there is no liquid market; or
  • Transactions whose size exceeds a specific size for the instrument in question, exposing liquidity providers to undue risk.

Access on a reasonable commercial basis to information on the transparency regime

Communications from CNMV on the transparency regime

• Suspension of certain waivers on pre-trade transparency requirements in the trading in specific listed shares for six months (published in September 2018)  (10/09/2018)
• Suspension of certain waivers on pre-trade transparency requirements in the trading in specific listed shares for six months (published in August 2018)  (08/08/2018)
• Suspension of certain waivers on pre-trade transparency requirements in the trading in specific listed shares for six mounths (published in June 2018) (08/06/2018)
• Suspension of certain waivers on pre-trade transparency requirements in the trading in specific listed shares for sin months (published in May 2018) (09/05/2018)
• Suspension of certain waivers on pre-trade transparency requirements in the trading in specific listed shares for six months (published in April 2018) (11/04/2018)
• CNMV, in cooperation with ESMA, agrees to suspend certain waivers on pre-trade transparency requirements in the trading in specific listed shares for six months (08/03/2018)
• CNMV authorises the applicable regime for the deferred publication of the details of transactions in non-equity instruments, pursuant to Article 11 of MiFIR (14/11/2017)