Review of the MiFID framework

MiFID

The newly revised MiFID II is to be transposed into national law by the end of September 2025. Broadly, it amends the regulatory framework applicable to multilateral trading facilities, consolidated data requirements, the exemptions regime, which has been expanded, certain market structure provisions and best execution rules.

Specifically regarding commodities, the main amendments concern:

• Circuit breaker mechanisms, which suspend trading in the event of a sudden drop and which should include static and dynamic breakers unless it can be demonstrated that a single type of breaker is enough to manage volatility.
• The position limits regime and position management controls in commodity derivatives and derivatives on emission allowances.
• The definition of commodity derivatives trading as an ancillary activity, particularly within the framework of a group.

MiFIR Refit

The revised MiFIR came into force on 28 March 2024 as regards provisions not requiring Level 2 measures, as specified by the European Commission and ESMA.

These concern the end of pre-trade transparency for request-for-quote systems and voice systems for non-equity instruments, the end of the size-specific waiver, and pre- and post-trade transparency for listed and over-the-counter (OTC) derivatives subject to the clearing obligation. Since the regulation came into force, systematic internalisers in equity instruments have also been able to process orders at the mid-point of bid and ask prices, regardless of the size of the transaction.

However, other provisions with a significant bearing on the market need to be specified in RTS, including those dealing with transparency on equity and non-equity markets, the systematic internalisers regime, designated disclosure entities and transaction reporting.

At the end of May, ESMA published several consultations aimed at establishing some of these RTS. Within this framework, AMAFI is focusing particularly on the following topics:

• The economic conditions applicable to consolidated tape providers (CTPs).
• Obligations to make pre-trade and post-trade data available on reasonable business terms.
• The rules on post-trade transparency obligations for corporate bonds.
• Reference data on financial instruments, in particular OTC derivatives, as well as the new reporting standards.