What changed

PR_COD_1consamCom

18.10.2023

Symbols for procedures

PROVISIONAL AGREEMENT RESULTING FROM INTERINSTITUTIONAL NEGOTIATIONS

* Consultation procedure

Subject: Proposal for a regulation of the European Parliament and of the Council amending Regulation (EU) No 600/2014 as regards enhancing market data transparency, removing obstacles to the emergence of a consolidated tape, optimising the trading obligations and prohibiting receiving payments for forwarding client orders

*** Consent procedure

***I Ordinary legislative procedure (first reading)

***II Ordinary legislative procedure (second reading)

***III Ordinary legislative procedure (third reading)

(The type of procedure depends on the legal basis proposed by the draft act.)

Amendments to a draft act

Amendments by Parliament set out in two columns

Deletions are indicated in bold italics in the left-hand column. Replacements are indicated in bold italics in both columns. New text is indicated in bold italics in the right-hand column.

The first and second lines of the header of each amendment identify the relevant part of the draft act under consideration. If an amendment pertains to an existing act that the draft act is seeking to amend, the amendment heading includes a third line identifying the existing act and a fourth line identifying the provision in that act that Parliament wishes to amend.

Amendments by Parliament in the form of a consolidated text

New text is highlighted in bold italics. Deletions are indicated using either the ▌symbol or strikeout. Replacements are indicated by highlighting the new text in bold italics and by deleting or striking out the text that has been replaced.

By way of exception, purely technical changes made by the drafting departments in preparing the final text are not highlighted.

DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION

on the proposal for a regulation of the European Parliament and of the Council amending Regulation (EU) No 600/2014 as regards enhancing market data transparency, removing obstacles to the emergence of a consolidated tape, optimising the trading obligations and prohibiting receiving payments for forwarding client orders

(COM(2021)0727 – C90440/2021 – 2021/0385(COD))

(Ordinary legislative procedure: first reading)

The interinstitutional negotiations on the aforementioned proposal for a regulation have led to a compromise. In accordance with Rule 74(4) of the Rules of Procedure, the provisional agreement, reproduced below, is submitted as a whole to the Committee on Economic and Monetary Affairs for decision by way of a single vote.

– having regardREGULATION to(EU) the2023/… CommissionOF proposalTHE toEUROPEAN ParliamentPARLIAMENT andAND theOF CouncilTHE (COM(2021)0727),COUNCIL

– having regard to Article 294(2) and Article 114 of the Treaty on the Functioning of the European Union, pursuant to which the Commission submitted the proposal to Parliament (C9-0440/2021),

of ...

– having regard to Article 294(3) of the Treaty on the Functioning of the European Union,

amending Regulation (EU) No 600/2014 as regards enhancing ▌data transparency, removing obstacles to the emergence of ▌consolidated tapes, optimising the trading obligations and prohibiting receiving payments for forwarding client orders

– having regard to the opinion of the European Central Bank of 1 June 2022,

– having regard to the opinion of the European Economic and Social Committee of 23 March 2022,

– having regard to Rule 59 of its Rules of Procedure,

– having regard to the report of the Committee on Economic and Monetary Affairs (A9-0040/2023),

1. Adopts its position at first reading hereinafter set out;

2. Calls on the Commission to refer the matter to Parliament again if it replaces, substantially amends or intends to substantially amend its proposal;

3. Instructs its President to forward its position to the Council, the Commission and the national parliaments.

Amendment 1

AMENDMENTS BY THE EUROPEAN PARLIAMENT*

to the Commission proposal

---------------------------------------------------------

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

amending Regulation (EU) No 600/2014 as regards enhancing market data transparency, removing obstacles to the emergence of a consolidated tape, optimising the trading obligations and prohibiting receiving payments for forwarding client orders

(Text with EEA relevance)

(1) In its 2020 CMU Action Plan, the Commission announced its intention to table a legislative proposal to create a centralised data base which was meant to provide a comprehensive view on prices and volume of equity and equity-like financial instruments traded throughout the Union across a multitude of trading venues (‘consolidated tape’). On 2 December 2020, in its conclusion on the Commission’s CMU Action Plan, the Council encouraged the Commission to stimulate more investment activity inside the Union by enhancing data availability and transparency by further assessing how to tackle the obstacles to establishing a consolidated tape in the Union.

(2) In its roadmap on ‘The European economic and financial system: fostering openness, strength and resilience’ of 19 January 2021, the Commission confirmed its intention to improve, simplify and further harmonise capital markets’ transparency, as part of the review of Directive 2014/65/EU of the European Parliament and of the Council and of Regulation (EU) No 600/2014 of the European Parliament and of the Council. As part of efforts to strengthen the international role of the Euro, the Commission also announced that such reform would include the design and implementation of a consolidated tape, in particular for corporate bond issuances to increase the liquidity of secondary trading in euro-denominated debt instruments.

(3) Regulation (EU) No 600/2014 of the European Parliament and of the Council provides for a legislative framework for ‘consolidated tape providers’ or ‘CTPs’, both for equity and non-equity.non-equity instruments. Those CTPs are currently responsible for collecting from trading venues and approved publication arrangements (‘APAs’) market data about financial instruments and consolidating those data into a continuous electronic live data stream, which provides market data per financial instrument. The idea behind the introduction of a CTP was that market data from trading venues and APAs would be made available to the public in a consolidated manner, including all of the Union’s trading markets, using identical data tags, formats and user interfaces.

(4) To date, however, no supervised entity has applied for authorisation to act as a CTP. In its report of 5 December 2019 on the development in prices for pre- and post-trade data and on the consolidated tape for equity instruments, ESMA has identified three main obstacles that have prevented supervised entities to apply for registration as a CTP. First, a lack of clarity as to how the CTP is to procure market data from the various execution venues or from the data reporting service providers concerned. Second, insufficient quality in terms of harmonisation of the data reported by those execution venues to allow for a cost-efficient consolidation. Third, a lack of commercial incentives to apply for authorisation as a CTP. It is therefore necessary to remove those obstacles. Such removal requires, first, that all trading venues and systematic internalisers (‘SIs’)APAs provide CTPs with market data (provision rule).▌. It secondly requires an improvement of the data quality by harmonising the data reports that trading venues and SIsAPAs should submit to the CTP. It thirdly requires that market data contributors transmitcenter toof the CTP as close to real time as it is technically possible pre- and post-trade information for shares and ETFs and as close to real time as it is technically possible post-trade information for bonds and derivatives.CTPs.

(5) Article 1(7) of Directive 2014/65/EU of the European Parliament and of the Council requires operators of systems in which multiple third-party buying and selling trading interests in financial instruments are able to interact (‘multilateral systems’) to operate in accordance with the requirements concerning regulated markets (‘RMs’),▌, multilateral trading facilities (‘MTFs’), or organised trading facilities (‘OTFs’). The placement of that requirement in Directive 2014/65/EU has left room for varying interpretations of that requirement, which has led to an uneven playing field between multilateral systems that are licensed as ana RM,regulated market, MTF or OTF, and multilateral systems that are not licensed as such. In order to ensure a uniform application of that requirement, it should be introduced in Regulation (EU) No 600/2014.

(6) Article 4 of Regulation (EU) No 600/2014 allows competent authorities to waive the pre-trade transparency requirements for market operators and investment firms operating a trading venue who determine their prices by reference to the midpoint price of the primary market or the most relevant market in terms of liquidity. ▌In order to increase pre-trade transparency and thereby reinforce the price formation process, that waiver should only be applicable to orders with a size greater than or equal to a size to be determined by ESMA. When defining the threshold, it is appropriate for ESMA to take into account the impact of that measure on market quality, on the overall liquidity on Union trading venues, on end-investors’ outcomes, and on the domestic and international attractiveness and competitiveness of Union capital markets and firms. Where the consolidated tape for shares and exchange-traded funds (ETFs) will provide bid and offer prices from which a midpoint can be derived, the reference price waiver should also be available for systems deriving the midpoint price from the consolidated tape.

▌

(7) Dark trading is trading without pre-trade transparency, using the reference price waiver laid down in Article 4(1), point (a) of Regulation (EU) No 600/2014 and the negotiated trade waiver laid down in Article 4(a) point (a),4(1), point (i)(b)(i) of that Regulation. The use of both waivers is capped by the double volume cap (‘DVC’). Thecap, DVCwhich is a mechanism that limits the level of dark trading to a certain proportion of total trading in an equity instrument. The amount of dark trading in an equity instrument on an individual venue mayis not to exceed 4%4 % of total trading in that instrument in the Union. When this threshold is breached,exceeded, dark trading in that instrument on that venue is suspended. SecondlySecondly, the amount of dark trading in an equity instrument in the Union mayis not to exceed 8%8 % of total trading in that instrument in the Union. When this threshold is breachedexceeded, all dark trading under those waivers in that instrument is suspended. The venue specific threshold leaves room for continued use of those waivers on other platforms on which trading in that equity instrument is not yet suspended, until the Union wide threshold is breached.exceeded. This causes complexity in terms of monitoring the levels of dark trading and of enforcing the suspension. To simplify the double volume cap while keeping its effectiveness, this Regulation introduces athe new single volume cap relyingshould rely solely on the EU-wide threshold. That threshold should be loweredset toat 7 % to compensate for a potential increase of trading under those waivers as ain consequencerespect of abolishing the venue specificreference threshold.price Utilisingwaiver alland thenot availablecover andthe relevantnegotiated markettrade data,waiver. ESMA should regularly assess the calibration of thevolume thresholdcap ofthreshold, thetaking singleinto volumeaccount cap,financial itsstability scope,considerations, itsinternational effectsbest onpractices, the competitiveness of Union firms andfirms, the significance of the market impact and the efficiency of the price formation process in the Union. ESMA could also consider ways to thoroughly improve theformation, limitationsand thatformulate areits currentlysuggestions in place to limit dark trading, including further intervention on any trading system, asa opposedreport to only a subset thereof,the toCommission. ensureOn that thesebasis, arethe effectiveCommission inshould theirhave aimthe power to safeguardadjust the price formation processvolume withoutcap undulythreshold affectingthrough thea globaldelegated competitivenessact. ofESMA Unionshould firmsalso andassess the attractivenessappropriateness of the Union’s markets. Taking into account financial stability considerations, international bestvolume practicescap and developments, ESMA should formulatethe itsnecessity suggestionsto inremove ait reportor to the Commission by ...extend [threeit yearsto afterother thetrading entrysystems intoor forceexecution ofvenues thiswhich amendingderive Regulation],their andprices everyfrom twoa yearsreference thereafter.price.

(8) Article 10 of Regulation (EU) No 600/2014 contains requirements for trading venues to publish information related to transactions in non-equity instruments, including the price and the volume. Article 11 of that Regulation contains the grounds for national competent authorities to allow for delayed publication of those details. Deferred publication of those details is allowed where a transaction is above the large in scale (‘LIS’) size threshold and is in an instrument for which there is no liquid market, or where that transaction is above the size specific to the instrument threshold in case the transaction involves liquidity providers. National competent authorities have discretion in the duration of the deferred period and in the details of the transactions that may be deferred. That discretion has led to differing practices among the member states and to ineffective post-trade transparency publications. To ensure transparency towards all types of investors, it is necessary to harmonise the deferral regime at the level of the European Union, remove discretion at national level and facilitate market data consolidation. It is therefore appropriate to reinforce post-trade transparency requirements by removing the discretion for national competent authorities and setting out the categories of transactions for which deferral is allowed, taking into account the size of the transactions and the liquidity of the financial instruments concerned.

(7a) Article 8 of Regulation (EU) No 600/2014 introduced pre-trade transparency requirement in respect of non-equity instrument imposed on MTFs, OTFs or regulated markets, regardless of the trading system. The benefits were clear for trading venues that operate a central limit order book or periodic auction systems, where bids and offers are anonymous, firm and truly multilateral. Other trading systems, notably voice trading and request-for-quote-systems, provide requestors with tailor-made quotes, which have marginal informational value to other market participants. To reduce the regulatory burden imposed on trading venues and to simplify the applicable waivers, the requirement to publish firm or indicative quotes should only apply to central limit order books and periodic auction trading systems. In order to accommodate for limiting the pre-trade transparency to central limit order books and auction systems, the waiver requirements in Article 9 should be revised. The waiver that is available above a ‘size specific to the instrument’ for request for quote systems and for voice trading systems, should be removed.

(9) To ensure an adequate level of transparency, the price and the volume of a non-equity transaction should be published as close to real time as possible and the price should only be delayed until maximally the end of the trading day. However, in order not to expose liquidity providers in non-equity instruments to undue risk, it should be possible to mask the price and volume of very large transactions for a longer period of time, which should not exceed four weeks. The exact calibration of the various buckets corresponding to different time deferrals should be left to ESMA due to the technical expertise required to specify the calibration as well as due to the need to allow for the flexibility to amend the calibration. Those deferrals should be based on the liquidity of the non-equity instrument, using the issuance size as a proxy, and the size of the transaction (trade size) only. In order to simplify the pre-trade transparency regime for bonds and derivatives, the size specific to the instrument should be removed, and the large in scale size should be lowered so that only one threshold remains at an adequate level. ESMA should regularly review the calibrations of the deferrals applicable to the various buckets, with the goal to gradually decrease them should the qualitative and quantitative evidence allow it.

(7b) Articles 18 and 19 of Regulation (EU) No 600/2014 set out pre-trade transparency requirements applicable to systematic internalisers in respect of non-equity instruments when providing firm or indicative quotes to their clients. Those quotes are tailored to individual clients and have marginal informational value to other clients. Therefore those requirements should be removed. Nevertheless, systematic internalisers might fulfil pre-trade transparency requirements on a voluntary basis, for example to address needs of their retail clients.

(10) Article 13 of Regulation (EU) No 600/2014 requires market operators and investment firms operating a trading venue to make the pre-trade and post-trade information on transactions in financial instruments available to the public on a reasonable commercial basis (‘RCB’), and to ensure non-discriminatory access to that information. That Article has, however, not delivered on its objectives. The information provided by trading venues, APAs and systematic internalisers on a reasonable commercial basis does not enable users to understand market data policies and how the price for market data is set. ESMA issued guidelines explaining how the concept of RCB should be applied. These guidelines should be converted to legal obligations. Due to the high level of detail required to specify RCB and the required flexibility in amending the applicable rules based on the fast changing data landscape, ESMA should be empowered to develop draft regulatory technical standards specifying what constitutes a reasonable commercial basis and how RCB should be applied, thereby further strengthening the harmonised and consistent application of Article 13 of Regulation (EU) No 600/2014.

(7c) Currently the transparency regime for derivatives is part of the broader non-equity category for transparency, commingling together different types of financial instruments with on the one hand mostly securities (bonds) and on the other hand mostly contracts (derivatives). Transparency for non-equities, as well as for equities, relies on the concept of ‘traded on a trading venue’.. For certain derivatives this concept has proven to be problematic due to their lack of fungibility as well as due to the lack of appropriate identifying reference data. For that reason, the scope of derivatives transparency should not rely on the concept of ‘traded on a trading venue’, but instead on predefined characteristics of the derivatives. Such derivatives should be subject to transparency requirements, regardless of them being traded on or off venue. The derivatives to which transparency requirements apply should be those that are sufficiently standardised so that the data published in relation to them is meaningful for market participants beyond the contracting parties. This means that all exchange-traded derivatives should remain subject to transparency requirements. Other derivatives should be subject to transparency requirements where they are under the scope of the clearing obligations set out in Regulation (EU) No 648/2012, for which a degree of standardisation is a pre-requisite, and are centrally cleared. This ensures that transactions that are considered unsuitable for the clearing obligation, such as intra group transactions, are not subject to the transparency requirements either. Specifically for interest rate derivatives, only those that are the most standardised and liquid currency and tenor combinations should be in scope. Furthermore, recent market events have shown that lack of transparency in certain credit default swaps referencing globally systemically important banks or referencing an index comprising such banks might fuel speculation on the creditworthiness of such banks. Such credit default swaps should therefore also be subject to transparency requirements when they are centrally cleared even if they are not subject to the clearing obligation. The Commission should be empowered to amend the conditions for determining which derivatives should be subject to transparency requirements in case market developments require so.

(11)(8) InArticle order10 toof reinforceRegulation the(EU) priceNo formation600/2014 processcontains andrequirements for trading venues to maintainpublish ainformation levelrelated playingto fieldtransactions betweenin tradingnon-equity venuesinstruments, including the price and systematicthe internalisers,volume. Article 1411 of that Regulation (EU)contains Nothe 600/2014grounds requiresfor systematicnational internaliserscompetent authorities to makeallow publicfor alldelayed quotespublication inof equitythose instrumentsdetails. placedDeferred bypublication thatof systematicthose internaliserdetails belowis theallowed standardwhere marketa size.transaction Systematicis internalisersabove arethe freelarge-in-scale to▌size decidethreshold, whichis sizesin theyan quote,instrument asfor longwhich asthere theyis quoteno atliquid amarket, minimumor size▌is ofabove 10%the ofsize thespecific standardto marketthe size.instrument Thatthreshold possibility,in however,case hasthe ledtransaction toinvolves veryliquidity lowproviders. levelsNational ofcompetent pre-tradeauthorities transparencyhave provideddiscretion byin systematicthe internalisersduration inof equitythe instruments,deferred andperiod hasand hamperedin the achievementdetails of athe leveltransactions playingthat field.may Itbe isdeferred. thereforeThat necessarydiscretion tohas requireled systematicto internalisersdiffering topractices publishamong firmthe quotesMember relatingStates and to aineffective minimumand sizecomplex topost-trade betransparency determinedregime. byTo ESMA.ensure Whentransparency determiningtowards theall minimumtypes size,of investors, it is appropriate for ESMAnecessary to considerharmonise the following objectives: increasing pre-trade transparency of equitydeferral instrumentsregime forat the benefitlevel of end-investors; maintainingthe aEuropean levelUnion, playingremove fielddiscretion betweenat tradingnational venueslevel and systematic internalisers; providing end investorsfacilitate withmarket andata adequateconsolidation. choiceIt ofis tradingtherefore options;appropriate andto ensuringreinforce thatpost-trade thetransparency tradingrequirements landscapeby inremoving the Union remains attractive and competitive bothdiscretion domesticallyfor andcompetent internationally.authorities.

(12) In order to create a level playing field, in addition to the obligation to publish firm quotes ▌systematic internalisers should also not be allowed to match at midpoint below a size to be determined by ESMA and aligned with the size below which systematic internalisers’ pre-trade transparency requirements apply. It should furthermore be clarified that systematic internalisers should be allowed to match at midpoint above this size without complying with the tick-size regime. That would bring the Union in line with the prevalent international market practices.

(9) To ensure an adequate level of transparency, the price and the volume of bond, structured finance product and emission allowance transaction should be published as close to real time as possible. ▌ In order not to expose liquidity providers in such transactions to undue risk, it should be possible to defer the publication of certain details of the transactions. With regard to bonds, the categories of transactions for which deferrals are allowed should be determined considering the size of the transactions and the liquidity of the financial instruments concerned. The exact details of the deferral regime should be determined by means of regulatory technical standards which should be regularly reviewed in order to gradually decrease the applicable deferral duration. For the purpose of having a more stable transparency regime, a static determination of liquidity for the classes of non-equity instruments is needed. The draft regulatory technical standards developed by ESMA should specify which issuance sizes correspond to a liquid or illiquid market in bonds until its maturity, from which transaction size in either a liquid or illiquid bond a deferral may be applied and what the duration of the deferral should be, up to a maximum defined by this Regulation. In order to have an appropriate level of transparency for covered bonds, it is appropriate for the issuance size of such bonds to be determined in accordance with the criteria set out in COMMISSION DELEGATED REGULATION (EU) 2015/61 of 10 October 2014 to supplement Regulation (EU) No 575/2013 of the European Parliament and the Council (“LCR”). With regard to structured finance products and emission allowances, ESMA should specify the classes that have a liquid or illiquid market, which should not rely on frequent assessments. ESMA should define the applicable categories and duration of the deferrals. ESMA should apply the determination of liquid and illiquid markets in bonds, emission allowances and structured finance products also for the application of the pre-trade transparency waiver. Competent authorities should have the power to extend the period of deferred publication of the details of transactions executed in respect of the sovereign debt instruments issued by their respective Member State. It is appropriate for such an extension to be applicable throughout the Union. With regards to transactions in sovereign debt instruments not issued by Members States, such extensions should be established by means of regulatory technical standards.

(13) Market participants need core market data to be able to make informed investment decisions. Pursuant to the current Article 27h of Regulation (EU) 600/2014, sourcing core market data about certain financial instruments directly from trading venues and APAs requires that consolidated tape providers enter into separate licensing agreements with all those data contributors. That process is burdensome, costly and time consuming. It has been one of the obstacles to consolidated tape providers emerging on a cross market basis. This obstacle should be removed in order to enable consolidated tape providers to obtain the market data and to overcome licencing issues. Trading venues and APAs, or investment firms and systematic internalisers without intervention of APAs (‘market data contributors’) should be required to submit their market data to consolidated tape providers, and to use harmonised templates respecting high–quality data standards to do so. Only CTPs selected and authorised by ESMA should be able to collect harmonised market data from the individual data sources in accordance with the mandatory contribution rule. To make the market data useful for investors, market data contributors should be required to provide the CTP with market data as close as technically possible to real time.

(9a) The heterogeneity of derivatives should also result in a deferral regime that is separate from other non-equity instruments. While the duration of deferrals should also be determined, by means of regulatory technical standards, based on the size of the transaction and liquidity of the class of derivatives, ESMA should determine which classes are liquid or illiquid as well as above which size of the transaction and for which duration it should be possible to defer the publication of details of the transaction. ESMA should apply the determination of liquid and illiquid markets also for the application of the pre-trade transparency waiver.

(14) Title II and III of Regulation (EU) 600/2014 require trading venues, APAs, investment firms and systematic internalisers (‘market data contributors’) to publish pre-trade data on financial instruments, including bid and offer prices and post-trade data on transactions, including the price and volume at which a transaction in a specific instrument has been concluded. Market participants are not obliged to use the consolidated core market data provided by the CTP. The requirement to publish those pre-trade and post-trade data should therefore remain applicable to enable market participants to access market data. However, to avoid undue burden on market data contributors, it is appropriate to align the requirement for market data contributors to publish data as much as possible with the requirement to contribute data to the CTP.

(10) Article 13 of Regulation (EU) No 600/2014 requires market operators and investment firms operating a trading venue to make the pre-trade and post-trade information on transactions in financial instruments available to the public on a reasonable commercial basis (‘RCB’), and to ensure non-discriminatory access to that information. That Article has, however, not delivered on its objectives. The information provided by trading venues, APAs and systematic internalisers on a reasonable commercial basis does not enable users to understand market data policies and how the price for market data is set. ESMA issued guidelines explaining how the concept of RCB should be applied. These guidelines should be converted to legal obligations and strengthened, to ensure that it is not possible for trading venues, APAs, CTPs and SIs to charge for market data in line with the value that the market data represents to individual users. Due to the high level of detail required to specify RCB and the required flexibility in amending the applicable rules based on the fast-changing data landscape, ESMA should be empowered to develop draft regulatory technical standards specifying how RCB should be applied, thereby further strengthening the harmonised and consistent application of Article 13 of Regulation (EU) No 600/2014. Furthermore, ESMA should monitor and assess developments in market data policies and price-setting of market but also compliance with the rules. ESMA should provide the necessary updates based on the assessment.

(15) Due to the disparate quality of market data, it is difficult for market participants to compare those data, which devoids data consolidation of much added-value. It is of the utmost importance for the proper functioning of the transparency regime set out in Title II and III of Regulation No (EU) 600/2014 and for the consolidation of data by consolidated tape providers that market data are of high quality. It is therefore appropriate to require that those market data comply with high quality standards in terms of both substance and format. It should be possible to change the substance and the format of the data within a short time to allow for changing market practices and insights. Therefore the requirements for the quality of data should be specified by ESMA in draft regulatory technical standards and should take into account prevailing industry standards and practices, international developments and standards agreed at the Union or international level, as well as the advice of a dedicated consultative group, established by the Commission and tasked with providing indications limited to the output of the consolidated tape. ESMA should be closely involved in the work of that consultative group.

(11) In order to reinforce the price formation process and to maintain a level playing field between trading venues and systematic internalisers, Article 14 of Regulation (EU) No 600/2014 requires systematic internalisers to make public all quotes in equity instruments placed by that systematic internaliser below the standard market size. Systematic internalisers are free to decide which sizes they quote, as long as they quote at a minimum size of 10 % of the standard market size. That possibility, however, has led to very low levels of pre-trade transparency provided by systematic internalisers in equity instruments, and has hampered the achievement of a level playing field. It is therefore necessary to require systematic internalisers to publish firm quotes relating to a minimum size to be determined by means of regulatory technical standards. When developing those draft regulatory technical standards, it is appropriate for ESMA to consider the following objectives: increasing pre-trade transparency of equity instruments for the benefit of end-investors; maintaining a level playing field between trading venues and systematic internalisers; providing end investors with an adequate choice of trading options; and ensuring that the trading landscape in the Union remains attractive and competitive both domestically and internationally. In order to make systematic internalisers more competitive, they should be allowed to match at midpoint at any size.

(16) To better monitor reportable events, Directive 2014/65/EU harmonised the synchronisation of business clocks for trading venues and their members. To ensure that, in the context of the consolidation of market data, timestamps reported by different entities can be compared meaningfully, it is appropriate to extend the requirements for harmonisation of the synchronisation of business clocks to systematic internalisers, APAs and consolidated tape providers. Due to the level of technical expertise required to specify the requirements for application of a synchronized business clock, ESMA should be empowered to develop draft regulatory technical standards to specify the accuracy with which the clocks should be synchronized.

(12b) Under the current legal framework, when one of the two parties to a transaction is a systematic internaliser, the systematic internaliser is required to report a trade to an APA, while its counterparty is not required to do so. This has led many investment firms to opt in to the status of systematic internaliser in particular for the purpose of reporting the trades for their clients, while the firms were not dealing on own account on a systematic basis, thereby adding disproportionate requirements to these firms. Therefore, it is appropriate to introduce a status of a designated publishing entity that would allow an investment firm to be responsible for making a transaction public through an APA without having the need to take the status of systematic internaliser. Furthermore, the designated publishing entities should notify themselves to the competent authorities and ESMA should maintain a public register of such designated publishing entities by class of financial instruments so that market participants have a capacity to identify them.

(17) Article 23 of Regulation (EU) No 600/2014 requires that the majority of trading in shares takes place on trading venues or systematic internalisers (‘share trading obligation’). This requirement does not apply to trades in shares which are non-systematic, ad hoc or irregular and infrequent. It is not clear when this exemption applies. ESMA therefore clarified this by making a distinction between shares on the basis of their International Securities Identification Number (ISIN). Pursuant to that distinction, only shares with an EEA ISIN are subject to the share trading obligation. That approach provides clarity to market participants trading in shares. It is therefore appropriate to incorporate ESMA’s current practice in Regulation (EU) No 600/2014, while simultaneously removing the exemption for trades in shares which are non-systematic, ad-hoc or irregular and infrequent.▌

(13) Market participants need core market data to be able to make informed investment decisions. Pursuant to the current Article 27h of Regulation (EU) 600/2014, sourcing ▌ data about certain financial instruments directly from trading venues and APAs requires that consolidated tape providers enter into separate licensing agreements with all those data contributors. That process is burdensome, costly and time consuming. It has been one of the obstacles to consolidated tape providers emerging in any asset class. This obstacle should be removed in order to enable consolidated tape providers to obtain the ▌ data and to overcome licencing issues. Trading venues and APAs (‘data contributors’) should be required to submit their ▌data to consolidated tape providers, and to use harmonised templates respecting high–quality data standards to do so. Data contributors should also provide regulatory data to keep investors informed about the status of the system matching orders, such as if a market outage has occurred, and of the status of the financial instrument, such as suspensions or trading halts.

(18) Determination of the date by which transactions are reported is important to ensure sufficient preparedness by both supervisors and reporting entities. It is also crucial to align the timing of changes in different reporting frameworks. Setting this date in a delegated act will provide the necessary flexibility and aligns ESMA’s empowerments with those laid down in Regulation (EU) 2019/834. To increase overall market reporting consistency, ESMA should also take account of international developments and standards agreed upon at Union or global level when developing relevant draft regulatory technical standards.

(13a) Only CTPs selected and authorised by ESMA should be able to collect ▌data from the individual data sources in accordance with the mandatory contribution rule. To make the ▌data useful for investors, ▌data contributors should be required to provide the CTP with ▌data as close to real time as technically possible ▌.

(19) Reporting in financial markets – in particular transaction reporting – is already highly automated and data is more standardised. Some inconsistencies between frameworks have already been resolved in the European Market Infrastructure Regulation (EMIR) Refit and Securities Financing Transactions Regulation (SFTR). The empowerments for ESMA should be aligned to adopt technical standards and ensure greater consistency in transaction reporting between the EMIR, SFTR and MiFIR frameworks. This will improve transaction data quality and avoid unnecessary additional costs for the industry. In addition, the transaction reporting should allow for a broad exchange of transaction data between national competent authorities to adequately reflect the latter’s evolving supervisory needs to monitor the most recent market developments and potential related risks. This should address, for instance, the need for any national competent authority to obtain a comprehensive overview of the investment made by clients residing, domiciled or established in its jurisdiction, including where such investments are made through investment firms authorised in another Member State or financial instruments for which it is not the competent authority of the most relevant market in terms of liquidity.

(14) Title II and III of Regulation (EU) No 600/2014 require trading venues, APAs, investment firms and systematic internalisers ▌to publish pre-trade data on financial instruments, including bid and offer prices and post-trade data on transactions, including the price and volume at which a transaction in a specific instrument has been concluded. Market participants are not obliged to use the consolidated core market data provided by the CTP. The requirement to publish those pre-trade and post-trade data should therefore remain applicable to enable market participants to access market data. However, to avoid undue burden on market data contributors, it is appropriate to align the requirement for market data contributors to publish data as much as possible with the requirement to contribute data to the CTP.

(19a) Market participants and ESMA have shown that the existing reporting regime can create uncertainty about who should report transactions and can lead to double reporting. The problem is particularly acute when investment firms trading with each other do not know whether their counterparty is a systematic internaliser for the traded financial instrument, and as such should report transactions to the approved publication arrangement. In addition, the link between the reporting obligation and the status of systematic internaliser has led to an inflated number of systematic internalisers in the Union, distorting the picture of market participants. The link between the systematic internaliser status and the post-trade transparency and reporting requirements should be removed, introducing instead the possibility for market participants to register as a designated reporting entity. In addition, ESMA should establish a register of all designated reporting entities, specifying their identity as well as the instruments or classes of instruments for which they are designated reporting entities. That would eliminate uncertainty about who should report a transaction and reduce the regulatory burden on investment firms, particularly smaller ones. Such an approach would also have the advantage that only those firms that qualify or have opted in as systematic internalisers will act as liquidity providers, providing further clarity to the overall structure of the equity market.

(15) Due to the disparate quality of market data, it is difficult for market participants to compare those data, which devoid data consolidation of much added value. It is of the utmost importance for the proper functioning of the transparency regime set out in Title II and III of Regulation (EU) No 600/2014 and for the consolidation of data by consolidated tape providers that market data are of high quality. It is therefore appropriate to require that those market data comply with high quality standards in terms of both substance and format. It should be possible to change the substance and the format of the data within a short time to allow for changing market practices and insights. Therefore the requirements for the quality and substance of data should, where necessary, be specified by means of regulatory technical standards and should take into account prevailing industry standards and practices, international developments and standards agreed at the Union or international level, as well as the advice of a dedicated expert stakeholder group, established by the Commission and tasked with providing advice on the quality and substance of data and quality of the transmission protocol. ESMA should be closely involved in the work of that expert stakeholder group.

(20) Competition among consolidated tape providers ensures that the consolidated tape is provided in the most efficient way and under the best conditions for users. However, no entity has, up until now, applied to act as a consolidated tape provider. It is therefore considered appropriate to empower ESMA to periodically organise a competitive selection procedure to select a single entity which is able to provide the consolidated tape for each specified asset class. ESMA should prioritise the selection and authorisation of a consolidated tape provider for bonds, followed by shares and ETFs and finally by derivatives. The selection processes for each CTP should be staggered at regular intervals, with each selection process starting no later than six months following the initiation of the preceding one. Given the similarities between shares and ETFs, ESMA should conduct a parallel process for those two financial instruments, accepting proposals for either a single consolidated tape comprising both shares and ETFs, or two separate tapes. For both shares and ETFs the market data that data contributors are required to send to the relevant CTP should contain pre-trade and post-trade market data related to the first five layers of the order books.

(16) To better monitor reportable events, Directive 2014/65/EU harmonised the synchronisation of business clocks for trading venues and their members. To ensure that, in the context of the consolidation of market data, timestamps reported by different entities can be compared meaningfully, it is appropriate to extend the requirements for harmonisation of the synchronisation of business clocks to designated publishing entities, systematic internalisers, APAs and consolidated tape providers. Due to the level of technical expertise required to specify the requirements for application of a synchronized business clock, ESMA should be empowered to develop draft regulatory technical standards to specify the accuracy with which the clocks should be synchronized.

(21) According to data presented in the impact assessment accompanying the proposal for this Regulation, the expected revenue generation for the consolidated tape will vary depending on the precise features of the tape. The expected revenue of the CTP should significantly exceed the cost of its production and therefore help to build a solid revenue participation scheme whereby the CTP and the market data contributors share aligned commercial interests. This principle should not prevent CTPs from making a necessary margin to maintain a viable business model and from using the core market data to offer further analytics or other services aimed to increase the revenue pool. The market data contributor should at least receive a remuneration based on the costs it has incurred in generating the data and providing it to the CTP. Retail investors should have access to the consolidated tape, either free of charge or for a nominal annual fee, and the tape provider should ensure that the information provided to retail investors is easily accessible and displayed in a user-friendly and understandable format.

(17) Article 23 of Regulation (EU) No 600/2014 requires that most of the ▌trading in shares takes place on trading venues or systematic internalisers (‘share trading obligation’). This requirement does not apply to trades in shares which are non-systematic, ad hoc, or irregular and infrequent. It is currently not sufficiently clear when this exemption applies. ESMA therefore clarified this by making a distinction between shares on the basis of their International Securities Identification Number (ISIN). Pursuant to that distinction, only shares with an EEA ISIN and which are traded on a trading venue are subject to the share trading obligation. That approach provides clarity to market participants trading in shares. It is therefore appropriate to incorporate ESMA’s current practice in Regulation (EU) No 600/2014, while simultaneously removing the exemption for trades in shares which are non-systematic, ad-hoc or irregular and infrequent. ▌

(22) There is an objective difference between a venue of primary admission and other trading venues that serve as secondary trading markets. A venue of primary admission admits companies to the public markets, playing a crucial role in the life of a share and for the share’s liquidity. This is particularly true in the case of shares listed on smaller regulated markets which remain typically traded mostly on the venue of primary admission. In smaller regulated markets and SME growth markets the level of concentration of trading in shares, for which they are also the venue of primary admission, means that their relative contribution to the fragmentation of trading in the Union is less significant compared to that of larger regulated markets. The average daily trading volume of shares in the smaller regulated markets is relatively low, often accounting for less than 1 % of the average daily trading volume of the Union as a whole. Smaller regulated markets and SME growth markets are, on average, less diversified and more dependent on data revenues, and the mandatory contribution to the consolidated tape for shares could deprive them of their most important source of income. Therefore, given the lower levels of fragmentation of smaller markets, their relative share of the overall trading landscape and legitimate concerns about the viability of their business, an exclusion from the mandatory contributions to the consolidated tape should be considered appropriate to allow them to maintain their local admissions and safeguard a rich and vibrant ecosystem in line with the objectives of the Capital Markets Union. From a procedural perspective, the first exclusion criterion should be market share; if the market share at any future point exceeds the threshold set out in this Regulation, fragmentation criteria should apply as alternative exemption criteria. Notwithstanding the mandatory contribution exemption, smaller regulated markets that wish to be included in the consolidated view provided by the consolidated tape should be able to opt in to the mandatory contribution scheme by notifying ESMA of their intent. Nevertheless, the development of a consolidated tape should aim to eventually attain a complete representation of the Union’s trading venues, to achieve the full benefits of an integrated capital markets union.

▌

(23) The desired outcome of the consolidated tape would be to provide end investors with a truly consolidated overview of the trading opportunities available in the Union, including small regulated markets and lower trading costs through increased cross-border competition, thereby increasing the overall domestic and international attractiveness of Union capital markets, and fostering their growth, in line with the objectives of the capital markets union. Regardless of the exemption granted to smaller regulated markets under this Regulation from the mandatory contribution of market data to the consolidated tape, a dedicated revenue participation scheme▌ for the consolidated tape for shares and ETFs should be established, in order to incentivise their opt-in to the mandatory contribution scheme, which should remain nonetheless entirely voluntary. In particular, data from trades in the less liquid shares should attract a higher remuneration than their notional trading value would indicate. Whether a share is less liquid should be determined on the basis of the proportion of pre-trade transparent liquidity displayed by the regulated market that admits the less liquid share, relative to the average daily trading turnover in that share.

(19) Reporting in financial markets – in particular transaction reporting – is already highly automated and data is more standardised. Some inconsistencies between frameworks have already been resolved in the European Market Infrastructure Regulation (EMIR), Refit and Securities Financing Transactions Regulation (SFTR). The empowerments for ESMA should be aligned to adopt technical standards and ensure greater consistency in transaction reporting between the EMIR, SFTR and MiFIR frameworks. This will improve transaction data quality and avoid unnecessary additional costs for the industry. Furthermore, the transaction reporting should allow for a broad exchange of transaction data among national competent authorities, in order to adequately reflect the latter’s evolving supervisory needs to monitor the most recent market developments and potential related risks.

(24) Given the novelty of the consolidated tape in the context of the EU financial markets, ESMA should be entrusted with providing the European Commission with an assessment of the revenue participation scheme designed to incentivise smaller regulated markets to opt in to the mandatory contribution of market data in the context of the consolidated tape for shares and ETFs. This report should be prepared on the basis of at least 18 months of operation of the CTP and subsequently at the request of the Commission, where deemed necessary or appropriate. The assessment should focus in particular on whether the participation of small regulated markets in the revenue of the CTP is fair and effective in inducing those markets to contributing to the consolidated tape and in safeguarding the role that these markets play in their local financial ecosystem. It is appropriate for that assessment to establish whether the inclusion of those smaller regulated markets in the consolidated tape resulted in an increase in the trading volumes of shares in those regulated markets, a positive effect on the participation of professional and retail investors in the market, and an improvement of the trading conditions for end-investors. The Commission should be empowered to revise the mechanism of allocation by way of a delegated act, where necessary or appropriate.

(19a) Currently investment firms are required to report their transactions to their competent authority in any financial instrument traded on a trading venue or if the underlying is traded on a trading venue or is an index or basket composed of financial instruments that are traded on a trading venue, regardless of the transaction being executed on venue or OTC. The concept of ‘traded on a trading venue’ has proven problematic in the case of OTC derivatives, for the same reason it has proven problematic in the case of applicable transparency requirements. Therefore, the new scope for transaction reporting of derivatives clarifies that transactions in OTC derivatives executed on venue shall be reported, and those transactions in OTC derivatives executed off-venue shall only be reported if they are subject to transparency requirements, or if the underlying is traded on a trading venue or is an index or basket composed of financial instruments that are traded on a trading venue.

(25) It is necessary to ensure that consolidated tape providers remedy information asymmetries in the capital markets in a sustainable manner, and to ensure that consolidated tape providers provide consolidated data that are reliable. Consolidated tape providers should therefore be obliged to adhere to organisational requirements and quality of service standards that must be met at all times once they have been authorised by ESMA. Quality standards should cover aspects related to the collection of consolidated core market data, accurate time-stamping of such data at various stages in the delivery chain, collection and administration of market data subscription fees, and allocation of revenue to market data contributors.

(19b) Trading venues should be obliged to provide ESMA with reference data for transparency purposes including identifiers of OTC derivatives. The identifier currently used for derivatives (ISIN) has proved cumbersome and ineffective for public transparency and should be remedied by using identifying reference data based on a globally agreed unique product identifier, such as the ISO 4914 Unique Product Identifier (UPI).. The UPI has been developed as an identification tool for OTC derivative products, with the intention to bring increased transparency and aggregation of data across the global OTC derivative markets. However, this unique identifier may not be sufficient and may need to be complemented by additional identifying data. Therefore, the Commission should specify by means of a delegated act the identifying reference data to be used with regard to OTC derivatives, including a unique identifier and any additional identifying reference data. In relation to the identifier to be used for the purpose of transaction reporting under the Regulation (EU) No 600/2014, the Commission should specify the most appropriate identifiers of OTC derivatives, which might be different to the identifier determined for transparency requirements, taking into account the different purposes of these requirements, in particular as regards supervision of market abuse performed by regulators.

(26) In order to safeguard market participants’ continued trust in the operation of a consolidated tape provider, such entities should periodically make a series of public reports concerning compliance with their obligations under this Regulation, in particular on performance statistics and incident reports relating to data quality and systems. Due to the highly technical nature of the substance of the report, ESMA should be empowered to specify the substance, format and timing.

(20) Competition among consolidated tape providers ensures that the consolidated tape is provided in the most efficient way and under the best conditions for users. However, no entity has, up until now, applied to act as a consolidated tape provider. It is therefore considered appropriate to empower ESMA to periodically organise a competitive selection procedure to select a single entity which is able to provide the consolidated tape for each specified asset class for a limited period of time. Initially, ESMA should start the selection procedure concerning the consolidated tape for bonds. Within six months after launching that selection procedure, ESMA should initiate the selection procedure for a CTP for shares and ETFs. Lastly, ESMA should start the selection procedure for the CTP on OTC derivatives within three months after the adoption of the delegated act specifying the appropriate OTC derivatives identifier for transparency purposes and not earlier than six months after the initiation of the selection procedure for a CTP for shares and ETFs.

(27) The requirement that trade reports should be made available free of access charges after 15 minutes currently applies to all trading venues, APAs and CTPs. For CTPs, that requirement stands in the way of commercialising the consolidation of the core market data and considerably limits the commercial viability of a potential CTP, since certain potential clients could prefer waiting for the consolidated free data rather than subscribing to the consolidated tape. This is in particular the case for bonds and derivatives that are in general not traded frequently and for which the data has often kept most of its value after 15 minutes. While the requirement to deliver the data for free after 15 minutes should remain in place for trading venues and APAs, it should be abandoned for CTPs to protect its potential business model.

(20a) The selection procedure is aimed at awarding the right to operate a consolidated tape for a period of five years. . It is subject to the rules laid down in the Regulation (EU, Euratom) 2018/1046 on the financial rules applicable to the general budget of the Union. ESMA should for all classes select a candidate based on its technical abilities to operate a CTP, including its ability to ensure business continuity and resilience, as well as its use of modern interfaces, the organisation of is management and decision making processes, its methods for ensuring data quality, the costs required for developing and operating a CTP, the simplicity of the licenses that users have to enter into in order to receive the consolidated data, including the amount of licensing types for various use cases or users, the level of fees charged to users and its processes for mitigating energy consumption. Specifically for the CTP for bonds, when selecting the CTP, ESMA should take into account the existence of a fair and equitable scheme for revenue distribution that acknowledges the role that smaller trading venues play in providing companies the opportunity to issue debt to finance their activities. For shares and ETFs, ESMA should require the CTP to be able to display the European best bid and offer, with no dissemination of the market identifier code of the venue. By July 2026, the European Commission should make an assessment of this level of pre-trade information for the functioning and competitiveness of the Union markets and may accompany this assessment, where appropriate, with a legislative proposal on the design of the consolidated tape.

(28) Article 28 of Regulation (EU) No 600/2014 requires that OTC derivatives that are subject to the clearing obligation are traded on trading venues. Regulation (EU) 2019/834 of the European Parliament and of the Council amended Regulation (EU) No 648/2012 of the European Parliament and of the Council to reduce the scope of the entities that are subject to the clearing obligation. In light of the close interconnection between the clearing obligation under Regulation (EU) 648/2012 and the derivatives trading obligation under Regulation (EU) 600/2014, and to ensure greater legal coherence and to simplify the legal framework, it is necessary and appropriate to re-align the derivatives trading obligation with the clearing obligation for derivatives. Without that alignment, certain smaller financial counterparties and non-financial counterparties would no longer be captured by the clearing obligation but continue to be captured by the trading obligation.

(20b) A selected applicant should without undue delay apply for authorisation. Within 20 working days of such application ESMA should assess if the application is complete and notify the applicant accordingly. Within three months of reception of a complete application, ESMA should either authorise or refuse authorisation through a reasoned decision. ESMA should base its decision to authorise or to refuse authorisation on its assessment on whether or not the applicant will be able to operate a CTP in compliance with all requirements within a reasonable time, and the reasoned decision should specify the conditions of operation of the consolidated tape, in particular the level of fees. In order to ensure an orderly start of operation, ESMA may allow the applicant a reasonable period after authorisation to complete the development of the consolidated tape.

(29) Article 6a of Regulation (EU) No 648/2012 provides for a mechanism to temporarily suspend the clearing obligation where the criteria on the basis of which specific classes of OTC derivatives have been made subject to the clearing obligation are no longer met, or where such suspension is considered necessary to avoid a serious threat to financial stability in the Union. Such suspension may, however, prevent counterparties from being able to comply with their trading obligation, laid down in Regulation (EU) 600/2014 because the clearing obligation is a pre-requisite to the trading obligation. It is therefore necessary to lay down that, where the suspension of the clearing obligation would lead to a material change in the criteria for the trading obligation, it should be possible to concurrently suspend the trading obligation for the same class or classes of OTC derivatives that are subject to the suspension of the clearing obligation.

(21) According to data presented in the impact assessment accompanying the proposal for this Regulation, the expected revenue generation for the consolidated tape will vary depending on the precise features of the tape. The CTPs should not be prevented from making a necessary margin to maintain a viable business model. Retail investors, academics and civil society organisations using the data for research purposes as well as public authorities for the execution of regulatory and supervisory competences, should have free access to the core market data and regulatory data. The CTP should ensure that the information provided to retail investors is easily accessible and displayed in a user-friendly and human readable format.

(30) An ad-hoc suspension mechanism is necessary to ensure that the Commission may swiftly react to significant changes in market conditions that may have a material effect on the trading of derivatives and their counterparties. Where such market conditions are present, and upon the request of the competent authority of a Member state, the Commission should be able to suspend the trading obligation, independently from any suspension of the clearing obligation. Such a suspension of the trading obligation should be possible where the activities of an EU investment firm with a non-EEA counterparty are unduly affected by the scope of the EU trading obligation on derivatives and where that investment firm acts as a market-maker in the category of derivatives subject to the trading obligation. The issue of overlapping DTOs is particularly acute when trading with counterparties domiciled in a third-country jurisdiction that applies its own DTO. This suspension would also help EU counterparties remaining competitive on global markets. When deciding upon the suspension of the trading obligation, the Commission should take into consideration the impact of such suspension on the clearing obligation laid down in Regulation (EU) No 648/2012.

(22) ▌ Trading venues facilitating the trading of shares via a pre-trade transparent order book play a key role in the price formation process. This is particularly true for small regulated markets and SME Growth Markets (‘small trading venues’) which are generally the main centre of liquidity for the securities they offer for trading. The data that such small trading venues contributes to the consolidated tape therefore plays a more determining role in the price formation for the shares these trading venues admit to trading. Notwithstanding the possibility granted to these regulated markets to not contribute to the consolidated tape, it is deemed appropriate to grant, to those regulated markets that decide to opt-in to the consolidated tape, preferential treatment in the revenue participation scheme, to allow these small trading venues to maintain their local admissions and safeguard a rich and vibrant ecosystem in line with the objectives of the Capital Markets Union.

(31) Open access provisions for exchange-traded derivatives reduce attractiveness to invest in new products as competitors may be able to get access without the upfront investment. The application of the open access regime for exchange-traded derivatives, laid down in Article 35 and 36 of Regulation (EU) No 600/2014, may thus limit competitiveness in these products, by removing incentives for regulated markets to create new exchange-traded derivatives. It should therefore be laid down that that regime should not apply to the CCP or trading venue concerned in respect of exchange-traded derivatives, thus fostering innovation and the development of exchange-traded derivatives in the Union.

(23) Small regulated markets and SME Growth Markets are trading venues which admit shares of issuers for which trading in the secondary market tends to be less liquid than the trading of shares admitted to trading on larger regulated markets. In order to avoid the negative impact the consolidated tape might have on these small trading venues, even though their inclusion in the consolidated tape might have positive effects on their viability and the liquidity of the securities traded on these venues, an opt-in mechanism for the trading venues where trading volume of shares is equal or below 1 % of the annual trading volume of shares in the Union should be established. Two alternative conditions should complement the first threshold. Either the considered venue is not part of a group with a trading venue with an annual trading volume in shares exceeding 1 % of the total trading volume in shares, or the concentration of the trading is very high in the considered venue (85 % of the total annual trading volume of shares are traded in the trading venue where they were initially admitted to trading). Only a few trading venues fulfil these criteria, therefore, only a small percentage of trading in the Union would not be compulsorily requested to provide data to the CTP. The trading venues benefiting from the opt-out would have the opportunity to join in, and if they decide to join, they should notify the CTP as well as ESMA about this decision. This decision is irrevocable and all the data – for shares as well as ETF – will be part of the CT afterwards.

(32) Financial intermediaries should strive to achieve the best possible price and the highest possible likelihood of execution for trades that they execute on behalf of their clients. To that end, financial intermediaries should select the trading venue or counterparty for executing their client trades solely on the basis of achieving best execution for their clients. It should be incompatible with that principle of best execution that a financial intermediary, when acting on behalf of its clients, receives a fee, a commission or any non-monetary benefit from a third party in exchange for routing client orders for execution by that third party. Investment firms should be therefore be prohibited from receiving such payment or any other non-monetary benefit. This prohibition is rendered necessary in light of the divergent practices by national competent authorities across the Union in their application and supervision of best execution requirements as laid out in Article 27 of Directive 2014/65/EU. For this reason, no further national discretions should be considered acceptable with respect to the rules applicable to the routing of client orders for execution.

(24) The CTP should redistribute part of the revenues generated by the consolidated tape of shares and ETFs to certain trading venues in accordance with a redistribution scheme based on three criteria. By means of a regulatory technical standard the weight of these criteria should be determined. In order to incentivise small trading venues to opt-in to the mandatory contribution of data to the consolidated tape for shares and ETFs, the first criterion should benefit from the highest weight and should apply to the total annual trading volume of small trading venues, namely regulated markets and SME growth markets that have 1 % or less of the annual trading volume of shares in the Union. The second criterion should receive the second highest weight and should remunerate data contributors that have provided initial admission of shares or ETFs in the five years before … [the date of entry into force of this amending Regulation] or thereafter. Considering the limited number of listings on small trading venues, the CTP should apply the relevant weight on the total annual trading volume of such venues, whereas for other venues the CTP should apply it to the trading volume pertaining to the shares and ETFs that have been initially admitted to trading in the five years since this review has been adopted and thereafter. The third criterion, which should receive the lowest weight of the three criteria, should remunerate the trading that derives from pre-trade transparent orders that contributes to the price formation process and provides pre-trade data to the CTP.

(32a) The energy crisis of 2022 has brought to light that the regulatory framework for commodity derivatives trading as set out in Directive 2014/65/EU could be further improved. In particular, the impact of higher and more frequent margin calls and the regulatory status of market participants, the impact of extreme volatility and prices and the impact of third country trade companies are elements that could warrant a review of the commodity derivatives framework. In particular, the impact and the consequences of introducing minimum holding periods for commodity derivatives is an element that deserves further consideration. ESMA should therefore carry out an analysis on whether such minimum holding period could effectively limit the volatility on derivatives markets without negatively impacting the functioning of those markets.

(24a) The effectiveness of a consolidated tape depends on the quality of the data transmitted to it by data contributors. In order to ensure a high level of data quality, ESMA should set out the conditions under which the CTP is allowed to temporarily suspend the redistribution of revenue in case the CTP proves that a data contributor has seriously and repeatedly breached the quality standards set out in this Regulation. Where that data contributor had complied with the data requirements, such data contributor should receive the share of the revenue to which they were entitled plus interest.▌

(33) The Commission should adopt the draft regulatory technical standards developed by ESMA regarding the precise characteristics of the deferral regime for non-equity transactions, regarding the provision of information on a reasonable commercial basis, regarding the application of the synchronised business clocks by trading venues, systematic internalisers, APAs and CTPs and regarding characteristics of the public reporting obligation of the CTP. The Commission should adopt those draft regulatory technical standards by means of delegated acts pursuant to Article 290 TFEU and in accordance with Articles 10 to 14 of Regulation (EU) No 1093/2010.

(26) In order to safeguard market participants’ continued trust in the ▌consolidated tape CTPs should periodically make a series of public reports concerning compliance with their obligations under this Regulation, in particular on performance statistics and incident reports relating to data quality and data systems. Due to the highly technical nature of the substance of the report, the content, timing, format and terminology of the reporting obligations should be determined by means of a regulatory technical standard.

(34) Since the objectives of this Regulation, namely to facilitate the emerging of a consolidated tape provider cross markets for each asset classes and to amend certain aspects of the existing legislation in order to improve transparency on markets in financial instruments but also to further enhance the level playing field between regulated markets and systematic internalisers, as well as enhance the international competitiveness of the Union’s capital markets, cannot be sufficiently achieved by the Member States, but can rather, by reason of its scale and effects, be better achieved at the Union level, measure should be adopted at Union level, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on European Union. In accordance with the principle of proportionality, as set out in that Article, this Regulation does not go beyond what is necessary in order to achieve those objectives. This Regulation furthermore respects the fundamental rights and observes the principles recognised in the Charter, in particular the freedom to conduct a business and the right to consumer protection,

(27) The requirement that trade reports should be made available free of charge after 15 minutes currently applies to all trading venues, APAs and CTPs. For CTPs that requirement prevents the commercial viability of a potential CTP, since certain potential clients could prefer waiting for the ▌ free core market data rather than subscribing to the consolidated tape. This is in particular the case for bonds and OTC derivatives that are in general not traded frequently and for which the data has often kept most of its value after 15 minutes. Therefore, while the requirement to deliver the core market data for free after 15 minutes should remain in place for trading venues and APAs, it should be abandoned for CTPs to ensure their viability.

(28) Article 28 of Regulation (EU) No 600/2014 requires that OTC derivatives that are subject to the clearing obligation are traded on trading venues. Regulation (EU) 2019/834 of the European Parliament and of the Council amended Regulation (EU) No 648/2012 of the European Parliament and of the Council to reduce the scope of the entities that are subject to the clearing obligation. In light of the close interconnection between the clearing obligation under Regulation (EU) No 648/2012 and the derivatives trading obligation under Regulation (EU) No 600/2014, and to ensure greater legal coherence and to simplify the legal framework, it is necessary and appropriate to re-align the derivatives trading obligation with the clearing obligation for derivatives. Without that alignment, certain smaller financial counterparties and non-financial counterparties would no longer be captured by the clearing obligation but continue to be captured by the trading obligation.

(29a) Post trade risk reduction services (PTRRS) are an essential tool of risk management with respect to OTC derivatives. PTRRS rely on technical transactions that are pre-arranged, non-price forming, market risk neutral, and that achieve a reduction in the risk in each of the portfolios. Portfolio compression services that are today exempt from best execution and transparency requirements are only a subset of PTRRS. In light of their technical and non-price forming nature, the transactions on OTC derivatives that are formed and established as result of PTRRS should not be subject to the derivatives trading obligation. Taking into account that PTRRS providers do not capture trading interest, they should not be considered to operate a multilateral system. There is likewise no rationale for making them pre- or post-trade transparent or to verify best execution so they should, finally, be exempted from those requirements. The Commission should be empowered to specify what constitutes post-trade risk reduction services and the particulars of the transactions to be recorded.

(29) Article 6a of Regulation (EU) No 648/2012 provides for a mechanism to temporarily suspend the clearing obligation where the criteria on the basis of which specific classes of OTC derivatives have been made subject to the clearing obligation are no longer met, or where such suspension is considered necessary to avoid a serious threat to financial stability in the Union. Such suspension may, however, prevent counterparties from being able to comply with their trading obligation, laid down in Regulation (EU) 600/2014 because the clearing obligation is a pre-requisite to the trading obligation. It is therefore necessary to lay down that, where the suspension of the clearing obligation would lead to a material change in the criteria for the trading obligation, it should be possible to concurrently suspend the trading obligation for the same class or classes of OTC derivatives that are subject to the suspension of the clearing obligation. ESMA should also have the possibility to request to the Commission the suspension of the derivatives trading obligation, where such a suspension is necessary to avoid or address adverse effects to liquidity or serious threat to financial stability and to ensure the orderly functioning of financial markets in the Union.

(30) An ad-hoc suspension mechanism is necessary to ensure that the Commission may swiftly react to significant changes in market conditions that may have a material effect on the trading of derivatives and their counterparties. Where such market conditions are present, and upon the request of the competent authority of a Member State, the Commission should be able to suspend the trading obligation, independently from any suspension of the clearing obligation. Such a suspension of the trading obligation should be possible where the activities of an EU investment firm with a non-EEA counterparty are unduly affected by the scope of the EU trading obligation on derivatives and where that investment firm acts as a market-maker in the category of derivatives subject to the trading obligation. The issue of overlapping DTOs is particularly acute when trading with counterparties domiciled in a third-country jurisdiction that applies its own DTO. This suspension would also help EU counterparties remaining competitive on global markets. When deciding upon the suspension of the trading obligation, the Commission should take into consideration the impact of such suspension on the clearing obligation laid down in Regulation (EU) No 648/2012.

(31) Open access provisions for exchange-traded derivatives might reduce attractiveness to invest in new products as competitors might be able to get access without the upfront investment. The application of the open access regime for exchange-traded derivatives, laid down in Article 35 and 36 of Regulation (EU) No 600/2014, might thus limit investment in these products, by removing incentives for regulated markets to create new exchange-traded derivatives. It should therefore be laid down that the regime should not apply to the CCP or trading venue concerned in respect of exchange-traded derivatives, thus fostering innovation and the development of exchange-traded derivatives in the Union.

(32) Financial intermediaries should strive to achieve the best possible price and the highest possible likelihood of execution for trades that they execute on behalf of their clients. To that end, financial intermediaries should select the trading venue or counterparty for executing their client trades solely on the basis of achieving best execution for their clients. It should be incompatible with that principle of best execution that a financial intermediary, when acting on behalf of its retail clients or clients that have opted into the professional client regime, receives a fee, a commission or any non-monetary benefit from a third party in exchange for forwarding client orders for execution by any third party. Investment firms should therefore be prohibited from receiving such payment. This prohibition is rendered necessary in light of the divergent practices by national competent authorities across the Union in their application and supervision of best execution requirements as laid out in Article 27 of Directive 2014/65/EU. It should be possible for a Member State where investment firms carried out such activity before ... [the date of entry into force of this amending Regulation] to exempt investment firms under its jurisdiction from this prohibition only until 30 June 2026 when those investment firms provide these services to clients domiciled or established in that Member State.

(32a) In order to ensure the flexibility necessary to adapt to developments in the financial markets, and to specify certain technical elements of Regulation No 600/2014, the power to adopt acts in accordance with Article 290 of the Treaty on the Functioning of the European Union should be delegated to the Commission in respect of adjusting the volume cap threshold; amending the conditions for determining which derivatives are subject to transparency requirements; specifying the identifying reference data to be used with regards to OTC derivatives; specifying what constitute post-trade risk reduction services for the purposes of Regulation (EU) No 600/2014; specifying the details of transactions to be recorded by investment firms and market operators that are providers of post-trade risk reduction services; extending the obligation to report transactions to AIFMs and management companies which provide investment services and activities and which execute transactions in financial instruments. It is of particular importance that the Commission carry out appropriate consultations during its preparatory work, including at expert level, and that those consultations be conducted in accordance with the principles laid down in the Interinstitutional Agreement of 13 April 2016 on Better Law-Making. In particular, to ensure equal participation in the preparation of delegated acts, the European Parliament and the Council receive all documents at the same time as Member States’ experts, and their experts systematically have access to meetings of Commission expert groups dealing with the preparation of delegated acts.

(32b) In order to ensure uniform conditions for the implementation of Regulation No 600/2014, in particular with regard to the suspension of the trading obligation for OTC derivatives, implementing powers should be conferred on the Commission. Those powers should be exercised in accordance with Regulation (EU) No 182/2011 of the European Parliament and of the Council.

(33) The Commission should be empowered to adopt the draft regulatory technical standards developed by ESMA with regard to: the characteristics of central limit order books and periodic auctions trading systems; the precise characteristics of the deferral regime for non-equity transactions; the provision of information on a reasonable commercial basis; the threshold for the application of the pre-trade transparency obligations for systematic internalisers and the minimum quote sizes for systematic internalisers; the quality and the substance of the data for the operation of the consolidated tapes, the quality of the transmission protocol, and measures to address erroneous trade reporting and enforcement standards in relation to data quality, including arrangements regarding cooperation between data contributors and the CTP; the application of the synchronised business clocks by trading venues, systematic internalisers, designated publishing entities, APAs and CTPs; the conditions for linking specific transactions and the means of the identification of aggregated orders resulting in the execution of a transaction, and the dates by which transactions are to be reported; the information to be provided by applicants for authorisation as CTP; the weights assigned to the criteria for the application of the revenue distribution scheme, and the method for calculating the amount of the revenue to be redistributed to each data contributor under that scheme; and the content, timing, format and terminology of the reporting obligation of CTPs. The Commission should adopt those draft regulatory technical standards by means of delegated acts pursuant to Article 290 TFEU and in accordance with Articles 10 to 14 of Regulation (EU) No 1093/2010.

(33a) The Commission should be empowered to adopt the implementing technical standards developed by ESMA with regard to the content and format of the notification to be submitted to Member States by firms that meet the definition of systematic internaliser; and the standard forms, templates and procedures for the notification or provision of information by applicants for authorisation as CTP. The Commission should adopt those implementing technical standards by means of implementing acts pursuant to Article 291 TFEU and in accordance with Article 15 of Regulation (EU) No 1095/2010.

(34) Since the objectives of this Regulation, namely to facilitate the emerging of a consolidated tape provider ▌for each asset classes and to amend certain aspects of the existing legislation in order to improve transparency on markets in financial instruments but also to further enhance the level playing field between regulated markets and systematic internalisers, as well as enhance the international competitiveness of the Union’s capital markets, cannot be sufficiently achieved by the Member States, but can rather, by reason of its scale and effects, be better achieved at the Union level, measure should be adopted at Union level, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on European Union. In accordance with the principle of proportionality, as set out in that Article, this Regulation does not go beyond what is necessary in order to achieve those objectives.

(35) This Regulation furthermore respects the fundamental rights and observes the principles recognised in the Charter, in particular the freedom to conduct a business and the right to consumer protection.

(36) Regulation (EU) No 600/2014 should therefore be amended accordingly,

HAVE ADOPTED THIS REGULATION:

(1) Article 1 is amended as follows:

(a) in▌ paragraph 1, the3 followingis pointreplaced (i)by isthe added:following:

(h) the scope of multilateral trading.’;

‘3. Title V of this Regulation ▌also applies to all financial counterparties ▌and ▌ non-financial counterparties that are subject to the clearing obligation under Title II of ▌Regulation (EU) No 648/2012.’;

(b) paragraph 3 is replaced by the following:

(b) ▌the following paragraph ▌is inserted:

‘3. Title V of this Regulation shall also apply to all financial counterparties referred to in Article 4a(1), second subparagraph, of Regulation (EU) No 648/2012 and to all non-financial counterparties referred to in Article 10(1), second subparagraph, of that Regulation.’;

‘5b All multilateral systems shall operate either in accordance with the provisions of Title II of Directive 2014/65/EU concerning MTFs or OTFs, or the provisions of Title III of that Directive concerning regulated markets.

(c) the following paragraph 7a is inserted:

Systematic internalisers shall operate in accordance with Title III of this Regulation.

‘7a. All multilateral systems shall operate either in accordance with the provisions of Title II of Directive 2014/65/EU concerning MTFs or OTFs, or the provisions of Title III of that Directive concerning regulated markets.

Without prejudice to Articles 23 and 28, all investment firms concluding transactions in financial instruments which are not concluded on multilateral systems or systematic internalisers shall comply with Articles 20 and 21 of this Regulation.’;

All investment firms which, on an organised, frequent, systematic and substantial basis, deal on own account when executing client orders outside a regulated market, an MTF or an OTF shall operate in accordance with Title III of this Regulation.

(c) paragraphs 6, 7 and 8 are replaced by the following:

Without prejudice to Articles 23 and 28, all investment firms concluding transactions in financial instruments which are not concluded on multilateral systems or systematic internalisers shall comply with Articles 20, 21, 22, 22a, 22b and 22c, of this Regulation.’;

‘6. Articles 8, 8a, 8b, 10 and 21 shall not apply to regulated markets, market operators and investment firms in respect of a transaction entered into by a member of the European System of Central Banks (ESCB), where that member has given prior notification to its counterparty that the transaction is exempt, and where any of the following applies:

(a) the member of the ESCB is a member of the Eurosystem acting under Chapter IV of Protocol (No 4) on the Statute of the European System of Central Banks, with the exception of Article 24 of that Statute;

(b) the member of the ESCB is not a member of the Eurosystem and the transaction is entered into in performance of monetary or foreign exchange policy, including operations carried out to hold or manage official foreign reserves, which that member of the ESCB is legally empowered to pursue; or

(c) the transaction is entered into in performance of financial stability policy, which that member of the ESCB is legally empowered to pursue.

7. Paragraph 6 shall not apply in respect of transactions entered into by a member of the ESCB which is not a member of the Eurosystem, in performance of their investment operations.

8. ESMA shall, in close cooperation with the ESCB, develop draft regulatory technical standards to specify the monetary, foreign exchange and financial stability policy operations and the types of transactions to which paragraphs 6 and 7 apply with regard to members of the ESCB which are not members of the Eurosystem.

ESMA shall submit those draft regulatory technical standards to the Commission by ... [24 months after the date of entry into force of this amending Regulation].

Power is delegated to the Commission to supplement this Regulation by adopting the regulatory technical standards referred to in the first subparagraph in accordance with the procedure laid down in Articles 10 to 14 of Regulation (EU) No 1095/2010.’;

(2) in Article 2, paragraph 1 is amended as follows:

(a) point (11) is replaced by the following:

‘(11) ‘multilateral system’ means any system or facility in which multiple third-party buying and selling trading interestinterests in financial instruments are able to interact in the system;’;

(aa)(b) the following point (16a) is▌is inserted:

‘(16a) ‘designated reportingpublishing entity’ means an investment firm responsible for making information on transactions public through an APA in accordance with Articles 20(1) and 21(1);’;

(ab)(c) point (17) is amendedreplaced asby follows:the following:

(a) in point (a), the following point is added:

‘(17) ‘liquid market’ means:

‘(iiia) the issuance size for corporate bonds;’;

(a) for the purposes of Articles 9, 11 and 11a:

(b) point (b) is replaced by the following:

(i) as regards bonds a market where there are ready and willing buyers and sellers on a continuous basis, and where the market is assessed according to the issuance size of the bond;

‘(b) for the purposes of Articles 4, 5 and 14, a market for a financial instrument that is assessed according to the following criteria:

(ii) as regards a financial instrument or a class of financial instruments other than those referred to in point (i), a market where there are ready and willing buyers and sellers on a continuous basis, and where the market is assessed in accordance with the following criteria, taking into consideration the specific market structures of the particular financial instrument or of the particular class of financial instruments:

(i) the market capitalisation;

– the average frequency and size of transactions over a range of market conditions, having regard to the nature and life cycle of products within the class of financial instrument;

(ii)– the averagenumber dailyand numbertype of transactions inmarket thoseparticipants, financialincluding instruments,the inratio particular,of themarket factparticipants thatto atraded financial instrumentinstruments isin tradeda daily;particular product;

(iii) the average daily turnover for those financial instruments;’;

– the average size of spreads, where available;

(b) the following point (34a) is inserted:

– the issuance size, where appropriate.

‘(34a) ‘market data contributor’ means a trading venue, an APA, or, for the purpose of pre-trade transparency for shares, an investment firm, operating a systematic internaliser;’;

(b) for the purposes of Articles 4, 5 and 14, a market for a financial instrument that is traded daily where the market is assessed according to the following criteria:

(c) point (35) is replaced by the following:

(i) market capitalisation of that financial instrument;

‘(35) ‘consolidated tape provider’ or ‘CTP’ means a person authorised in accordance with Title IVa, Chapter 1 of this Regulation to provide the service of collecting market data ▌from market data contributors, and of consolidating those data into a continuous electronic live data stream providing regulatory data and core market data ▌and of providing them to user of market data;’;

(ii) the average daily number of transactions in that financial instrument;

(ca) point (36a) is replaced by the following:

(iii) the average daily turnover for that financial instrument;’;

‘(36a) ‘data reporting services provider’ means a person referred to in points (34), (35) and (36) and a person referred to in Article 27b(2);’;

(d) the following point is inserted:

(d) the following points (36b) ▌, (36c) and (36d) are inserted:

‘(32a) ‘OTC derivative’ means an OTC derivative as defined in Article 2(7) of Regulation (EU) No 648/2012;’;

(36b) ‘core market data’ means:

(e) point (35) is replaced by the following:

(a) all of the following data on equities:

‘(35) ‘consolidated tape provider’ or ‘CTP’ means a person authorised in accordance with Title IVa, Chapter 1 of this Regulation to provide the service of collecting ▌data ▌from trading venues and APAs, and of consolidating those data into a continuous electronic live data stream providing regulatory data and core market data;’;

(i) for lit continuous trading protocols, the prices of the five best bids and offers with corresponding volumes available at those prices;

(g) the following points ▌are inserted:

(ia) for auction systems, the price at which the trading algorithm would be best satisfied and the volume potentially executed at that price by participants in that system;

‘(36b) ‘core market data’ means:

(ii) for all price-forming trades across all trading mechanisms, the transaction price and volume executed, the transaction time, the trading protocol, applicable waivers and deferrals;

(a) all of the following data on a given share or ETF at any given timestamp:

(iii) the intra-day auction information;

(i) for continuous order books, the European best bid and offer with the corresponding volume;

(iv) the end-of-day auction information;

(ii) for auction systems, the price at which the trading algorithm would be best satisfied and the volume potentially executed at that price by participants in that system;

(v) the market identifier code identifying the execution venue;

(iii) the transaction price and volume executed at that price;

(iv) for transactions, the type of trading systems, and the applicable waivers and deferrals;

(v) except for the information referred to in points (i)and (ii), the ▌identifier code uniquely identifying the trading venue and, for other execution venues, the identifier code identifying the type of execution venue;

(vi) the standardised instrument identifier that applies across venues;

(vii) the timestamp information on all of▌ the following:following, as applicable:

- the venue’s time of execution of the trade or of an amendment to the best bid or offer price or volume, an amendment to the indicative price or volume, and amendment to the trading status of an instrument;

– the ▌execution of the transaction and any amendment thereto;

- the venue’s time of publication of the elements listed in the first indent;

– the entry of the best bids and offers into the order book;

-– anythe changeindication, toin thean tradingauction statussystem, of anthe instrumentprices or segment;volumes;

- the receipt of market data by the consolidated tape provider;

– the publication by the trading venues of the elements listed in the first, second and third indents;

-– the dissemination of consolidatedcore market data to subscribers by the consolidated tape provider;▌;

(viii) the trading protocols and the applicable waivers or deferrals;

▌ (b) all of the following data on a given bond or OTC derivative at any given timestamp:

(b) all of the following data on non-equity instruments:

(i) the transaction price and quantity or size executed at that price;

(i) the transaction price and quantity/size executed at the stated price;

(ii) the ▌identifier code uniquely identifying the trading venue and, for other execution venues, the identifier code identifying the type of execution venue;

(ii) the market identifier code identifying the execution venue;

(iii) for bonds, the standardised instrument identifier that applies across venues;

(iii) standardised instrument identifier that applies across venues;

(iv) for OTC derivatives, the identifying reference data as referred to in Article 27(1), second subparagraph;

(iv)(v) the timestamp information on all of the following:

- the time of execution of the trade;

– the ▌execution of the transaction and any amendment thereto;

- the time of publication of the trade;

– the ▌publication by the trading venues of the transaction;

-– the receiptdissemination of market data from thecore market data contributors;▌;

- the receipt of market data at the consolidator’s aggregation/consolidation mechanism;

(vi) the type of trading system and the applicable waivers or deferrals;

- the dissemination of consolidated market data to subscribers;

(36c) ‘regulatory data’ means data related to the status of systems matching orders in financial instruments and data related to the trading status of individual financial instruments;’;

(v) the trading protocols and the applicable waivers or deferrals;

(36c) ‘regulatory data’ means data related to the status of systems matching orders in financial instruments, including information about circuit breakers, trading halts, and opening and closing prices of those financial instruments;

(36d) ‘market operator group’ means an undertaking or a group that owns or controls two or more market operators within the Union;’;

(3) Article 4 is amended as follows:

▌

(a) in paragraph 1, point (b)(i) is replaced by the following:

(b) in paragraph 2, the first subparagraph is replaced by the following:

‘(i) made within the current volume weighted spread reflected on the order book or the quotes of the market makers of the trading venue operating that system;’;

‘The reference price referred to(b) in paragraph 1,6, first subparagraph, point (a) shall beis establishedreplaced by obtaining either of the following:

(a) the midpoint within the current bid and offer prices of any of the following:

‘(a) the range of bid and offer prices or designated market-maker quotes, and the depth of trading interest at those prices, to be made public for each class of financial instrument concerned in accordance with Article 3(1), taking into account the necessary calibration for different types of trading systems as referred to in Article 3(2), and the details of pre-trade data;’;

(i) the trading venue where those financial instruments were first admitted to trading;

(ii) the most relevant market in terms of liquidity;

(iii) the consolidated tape for shares and ETFs;

(b) when the price referred to in point (a) is not available, the opening or closing price of the relevant trading session.’;

(ba) paragraph 6 is amended as follows:

(i) point (a) is replaced by the following:

‘(a) the range of bid and offer prices or designated market-maker quotes, and the depth of trading interest at those prices, to be made public for each class of financial instrument concerned in accordance with Article 3(1), taking into account the necessary calibration for different types of trading systems as referred to in Article 3(2), and the details of pre-trade data, including identifiers for different types of orders or quotes;’;

(ii) the following point is added:

‘(ea) the minimum size of an order that may be matched using the trading methodology referred to in paragraph 1, point (a), which shall be determined taking into account the international best practices, the competitiveness of Union firms, the significance of the market impact and the efficiency of the price formation.’;

(4) Article 5 is amended as follows:

(a) the title is replaced by the following:

‘Article 5 Volume cap’;

‘▌Volume cap’;

(b) paragraph 1 is replaced by the following:

‘1. Trading venues shall suspend their use of the waiverswaiver referred to in Article 4(1), point (a), and 4(1), point (b)(i) where▌where the percentage of volume traded in the Uniontrading in a financial instrument in the Union carried out under thosethe waiverswaiver exceeds 7%7 % of the total volume tradedof trading in that financial instrument in the Union. Trading venues shall base their decision to suspend the use of thosethe waiverswaiver on the data published by ESMA in accordance with paragraph 4, and shall take such decision within two working days after the publication of those data and for a period of sixthree months.’;

(c) paragraph 2 and 3 are deleted;

(d) paragraph 4 is replaced by the following:

‘4. ESMA shall publish within seven working days of the end of each calendar month all of the following data:

‘4. ESMA shall publish within seven working days of the end of March, June, September and December of each calendar year the total volume of ▌ trading in the Union per financial instrument in the previous 12 months, the percentage of trading in a financial instrument carried out across the Union under the waiver referred to in Article 4(1), point (a), and ▌the methodology that is used to derive those percentages.’;

(a) the total volume of Union trading per financial instrument in the previous 12 months;

(b) the percentage of trading in a financial instrument carried out ▌under the waivers referred to in Article 4(1), point (a), and Article 4(1), point (b)(i) across the Union and on each trading venue in the previous 12 months;

(c) the methodology that is used to derive the percentages referred to in point (b).’;

(e) paragraphs 5 and 6 are deleted;

(f) paragraphparagraphs 77, is8 and 9 are replaced by the following:

‘7. ToIn order to ensure a reliable basis for monitoring the trading taking place under the waiverswaiver referred to in Article 4(1), point (a), and Article 4(1), point (b)(i) and▌and for determining whether the limits referred to in paragraph 1 have been exceeded, operators of trading venues shall have in place systems and procedures to enable the identification of all trades which have taken place on their venue under thosethe waivers’;waiver.

(fa) the following paragraph is added:

8. The period for the publication of trading data by ESMA, and for which trading in a financial instrument under the waiver is to be monitored, shall start on ... [18 months after the date of entry into force of this amending Regulation].

‘9a. By ... [three years after the date of entry into force of this amending Regulation], and every two years thereafter, ESMA shall submit to the Commission a report assessing the volume cap threshold set out in paragraph 1 and the method by which it is defined, taking into account financial stability, international best practices, the competitiveness of Union firms, the significance of the market impact as well as the efficiency of the price formation.

9. ESMA shall develop draft regulatory technical standards to specify the method, including the flagging of transactions, by which it collates, calculates and publishes the transaction data, as outlined in paragraph 4, in order to provide an accurate measurement of the total volume of trading per financial instrument and the percentages of trading that use the waiver across the Union.

The Commission is empowered to adopt delegated acts in accordance with Article 50 to amend this Regulation pursuant to regular reviews of the volume cap threshold set out in paragraph 1. For the purpose of this subparagraph, the Commission shall take into account the report from ESMA referred to in the first subparagraph, international developments and standards agreed at Union or international level.’;

ESMA shall submit those draft regulatory technical standards to the Commission by ... [12 months after the date of entry into force of this amending Regulation].

(4a) Article 8 is amended as follows:

Power is delegated to the Commission to supplement this Regulation by adopting the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.

(a) paragraphs 1 and 2 are replaced by the following:

10. By ... [42 months after the date of entry into force of this amending Regulation], and every year thereafter, ESMA shall submit to the Commission a report assessing the volume cap threshold set out in paragraph 1, taking into account financial stability, international best practices, the competitiveness of Union firms, the significance of the market impact and the efficiency of the price formation.

1. Market operators and investment firms operating a trading venue shall make public current bid and offer prices and the depth of trading interests at those prices which are advertised through their systems for bonds, structured finance products, emission allowances, derivatives traded on a trading venue and package orders. Those market operators and investment firms shall make that information available to the public on a continuous basis during normal trading hours. That publication obligation does not apply to those derivative transactions of non-financial counterparties which are objectively measurable as reducing risks directly relating to the commercial activity or treasury financing activity of the non-financial counterparty or of that group.2. The transparency requirements referred to in paragraph 1 shall be calibrated for central limit order book and periodic auction systems only.’;

The Commission is empowered to adopt delegated acts in accordance with Article 50 to amend this Regulation by adjusting the volume cap threshold set out in paragraph 1. For the purpose of this subparagraph, the Commission shall take into account the report from ESMA referred to in the first subparagraph, international developments and standards agreed at Union or international level.’;

(b) paragraph 4 is deleted;

(5) Article 8 is amended as follows:

(5) Article 9 is amended as follows:

(a) the title is replaced by the following:

(a) in paragraph 1, points (b) and (e)(iii) are deleted;

‘Pre-trade transparency requirements for trading venues in respect of bonds, structured finance products and emission allowances’;

(ab)(b) paragraphparagraphs 31 isand 2 are replaced by the following:

‘3. Competent authorities shall regularly monitor the use and impact of the waivers granted in accordance with paragraph 1 and inform ESMA of their findings.

‘1. When applying a central limit order book or a periodic auction trading system, market operators and investment firms operating a trading venue shall make public current bid and offer prices and the depth of trading interests at those prices which are advertised through their systems in respect of bonds, structured finance products and emission allowances Those market operators and investment firms shall make that information available to the public on a continuous basis during normal trading hours.

Competent authorities, may, either on their own initiative or upon request by other competent authorities or by ESMA, withdraw a waiver granted under paragraph 1 if they observe that the waiver is being used in a way that deviates from its original purpose or if they consider that the waiver is being used to circumvent the requirements established in this Article.

2. The transparency requirements referred to in paragraph 1 shall be calibrated for different types of trading systems.’;

Competent authorities shall notify ESMA and other competent authorities of such withdrawal without delay and before it takes effect, providing full reasons for their decision.’;

(c) paragraphs 3 and 4 are deleted;

(b) in paragraph 5, point (d) is deleted;

(6) the following article is inserted:

▌

‘Article 8a Pre-trade transparency requirements for trading venues in respect derivatives

(6a) Article 11 is replaced by the following:

1. When applying a central limit order book or a periodic auction trading system, market operators operating a regulated market shall make public current bid and offer prices and the depth of trading interests at those prices which are advertised through their systems in respect of exchange-traded derivatives. Those market operators shall make that information available to the public on a continuous basis during normal trading hours.

‘Authorisation of deferred publication

2. When applying a central limit order book or a periodic auction trading system, market operators and investment firms operating an MTF or OTF shall make public current bid and offer prices and the depth of trading interests at those prices which are advertised through their systems in respect of OTC derivatives that are denominated in euro, Japanese yen, US dollar or pound sterling and that:

1. Competent authorities shall be able to authorise market operators and investment firms operating a trading venue to defer the publication of the details of transactions for a period calculated according to the size or type of transaction. The publication of the volume of very large transactions may be deferred for an extended period not exceeding four weeks.

(a) are subject to the clearing obligation under Article 5(2) of Regulation (EU) No 648/2012 and are centrally cleared, and, in respect of interest rate derivatives, have a contractually agreed tenor of 1, 2, 3, 5, 7, 10, 12, 15, 20, 25 or 30 years;

Market operators and investment firms operating a trading venue shall clearly disclose proposed arrangements for deferred trade-publication to market participants and the public. ESMA shall monitor the application of those arrangements for deferred trade-publication and shall submit an annual report to the Commission on how they are used in practice.

(b) are single-name credit default swaps that reference a global systemically important bank and that are centrally cleared; or

The arrangements for deferred publication shall be organised using the following five categories of transactions related to a bond, structured finance product, emission allowance or derivatives traded on a trading venue:

(c) are credit default swaps that reference an index comprising global systemically important banks and that are centrally cleared.

Those market operators and investment firms shall make that information available to the public on a continuous basis during normal trading hours.

3. The transparency requirements referred to in paragraphs 1 and 2 shall be calibrated for different types of trading systems.

4. The Commission is empowered to adopt delegated acts in accordance with Article 50 to amend paragraph 2, first subparagraph, as regards the OTC derivatives subject to the transparency requirements set out in that subparagraph in view of market developments.

Article 8b Pre-trade transparency for trading venues in respect of package orders

1. When applying a central limit order book or a periodic auction trading system, market operators and investment firms operating a trading venue shall make public current bid and offer prices and the depth of trading interests at those prices which are advertised through their systems in respect of package orders composed of bonds, structured finance products, emission allowances or derivatives. Those market operators and investment firms shall make that information available to the public on a continuous basis during normal trading hours.

2. The transparency requirements referred to in paragraphs 1 shall be calibrated for different types of trading systems.

(7) Article 9 is amended as follows:

(a) the title is replaced by the following:

‘Waivers for bonds, structured finance products, emission allowances, derivatives and package orders’;

(b) paragraph 1 is amended as follows:

(i) the introductory wording is replaced by the following:

‘1. Competent authorities shall be able to waive the obligation for market operators and investment firms operating a trading venue to make public the information referred to in Article 8(1), Article 8a(1) and (2) and 8b(1) for:’;

(ii) point (b) is deleted;

(iii) point (c) is replaced by the following:

‘(c) OTC derivatives which are not subject to the trading obligation as referred to in Article 28 and for which there is not a liquid market, and other financial instruments for which there is not a liquid market;’;

(iv) in point (e), point (iii) is deleted;

(bi) paragraph 2a is replaced by the following:

‘2a. Competent authorities shall be able to waive the obligation referred to in Article 8b(1) for each individual component of a package order.’;

(c) in paragraph 3, the first subparagraph is replaced by the following:

‘Competent authorities may, either on their own initiative or upon request by other competent authorities or by ESMA, withdraw a waiver granted under paragraph 1 if they observe that the waiver is being used in a way that deviates from its original purpose or if they consider that the waiver is being used to circumvent the requirements established in this Article.’;

(d) paragraph 4 is amended as follows:

(i) the first subparagraph is replaced by the following:

‘The competent authority responsible for supervising one or more trading venues on which a class of bond, structured finance product, emission allowance or derivative is traded may, where the liquidity of that class of financial instrument falls below a specified threshold, temporarily suspend the obligations referred to in Article 8. The specified threshold shall be defined on the basis of objective criteria specific to the market for the financial instrument concerned. Notification of such temporary suspension shall be published on the website of the relevant competent authority and shall be notified to ESMA. ESMA shall also publish that temporary suspension on its website.’;

(ii) the third subparagraph is replaced by the following:

‘Before suspending or renewing the temporary suspension under this paragraph of the obligations referred to in Article 8 or Article 8a, the relevant competent authority shall notify ESMA of its intention and provide an explanation. ESMA shall issue an opinion to the competent authority as soon as practicable on whether in its view the suspension or the renewal of the temporary suspension is justified in accordance with the first and second subparagraphs.’;

(e) paragraph 5 is amended as follows:

(i) the first subparagraph is amended as follows:

– point (b) is replaced by the following:

‘(b) the range of bid and offer prices and the depth of trading interests at those prices to be made public for each class of financial instrument concerned in accordance with Article 8(1), Article 8a(1) and (2) and 8b(1), taking into account the necessary calibration for different types of trading systems as referred to in Article 8(2), Article 8a(3) and 8b(2);’;

– point (d) is deleted;

– the following point is added:

‘(f) the characteristics of central limit order books and periodic auctions trading systems;’;

(ii) the second and third subparagraphs are replaced by the following:

‘ESMA shall submit those draft regulatory technical standards to the Commission by ... [12 months after the date of entry into force of this amending Regulation].

Power is delegated to the Commission to supplement this Regulation by adopting the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.’;

(8) Article 10 is replaced by the following:

‘Article 10 Post-trade transparency requirements for trading venues in respect of bonds, structured finance products, emission allowances and derivatives

‘1. Market operators and investment firms operating a trading venue shall make public the price, volume and time of the transactions executed in respect of bonds, structured finance products and emission allowances traded on a trading venue. Those requirements shall also apply to transactions executed in respect of exchange-traded derivatives and in respect of OTC derivatives as referred to in Article 8a(2). Market operators and investment firms operating a trading venue shall make details of all such transactions public as close to real time as is technically possible.

2. Market operators and investment firms operating a trading venue shall give access, on reasonable commercial terms and on a non-discriminatory basis, to the arrangements they employ for making public the information under paragraph 1 to investment firms which are obliged, pursuant to Article 21, to publish the details of their transactions in bonds, structured finance products, emission allowances and OTC derivatives as referred to in Article 8a(2).’;

3. Information relating to a package transaction shall be made available with respect to each component as close to real-time as is technically possible, having regard to the need to allocate prices to particular financial instruments and shall include a flag to identify that the component belongs to a package.

Where a component of the package transaction is eligible for deferred publication pursuant to Article 11 or 11a, information on the component shall be made available after the deferral period for the transaction has lapsed.

(9) Article 11 is amended as follows:

(a) the title is replaced by the following:

‘Deferred publication for bonds, structured finance products or emission allowances’;

(b) paragraph 1 is replaced by the following:

‘1. Market operators and investment firms operating a trading venue may defer the publication of the details of transactions executed in respect of bonds, structured finance products or emission allowances traded on a trading venue, including the price and the volume, in accordance with paragraphs 2, 3 and 4.

Market operators and investment firms operating a trading venue shall clearly disclose the arrangements for deferred publication to market participants and the public. ESMA shall monitor the application of those arrangements for deferred publication and shall submit a report every two years to the Commission on how they are used in practice.

1a. The arrangements for deferred publication with regard to bonds shall be organised by using five categories:

(a) category 1: transactions of a medium size in a financial instrument for which there is a liquid market;

(d) category 4: transactions of a large size in a financial instrument for which there is not a liquid market;

(e) category 5: transactions of a very large size, irrespective of the liquidity of the financial instrument.size.

2. The competent authority responsible for supervising one or more trading venues on which a class of bond, structured finance product, emission allowance or derivative is traded may, where the liquidity of that class of financial instrument falls below the threshold determined in accordance with the methodology as referred to in Article 9(5)(a), temporarily suspend the obligations referred to in Article 10. That threshold shall be defined based on objective criteria specific to the market for the financial instrument concerned. Such temporary suspension shall be published on the website of the relevant competent authority.

1b. The arrangements for deferred publication with regard to structured finance products or emission allowances traded on a trading venue shall be organised pursuant to the regulatory technical standards referred to in paragraph 4, point (e).

The temporary suspension shall be valid for an initial period not exceeding three months from the date of its publication on the website of the relevant competent authority. Such a suspension may be renewed for further periods not exceeding three months at a time if the grounds for the temporary suspension continue to be applicable. Where the temporary suspension is not renewed after that three month period, it shall automatically lapse.

When the deferral time period lapses, all the details of the transactions on an individual basis shall be published.’;

Before suspending or renewing the temporary suspension of the obligations referred to in Article 10, the relevant competent authority shall notify ESMA of its intention and provide an explanation. ESMA shall issue an opinion to the competent authority as soon as practicable on whether in its view the suspension or the renewal of the temporary suspension is justified in accordance with the first and second subparagraphs.

(c) paragraphs 2, 3 and 4 are replaced by the following:

2a. With respect to sovereign debt instruments, competent authorities of a sovereign debt instrument may allow, with regard to transactions in that sovereign debt instrument in the Union:

‘2. The competent authority responsible for supervising one or more trading venues on which a class of bonds, structured finance products or emission allowances is traded may, where the liquidity of that class of financial instrument falls below the threshold determined in accordance with the methodology as referred to in Article 9(5), point (a), temporarily suspend the obligations referred to in Article 10. That threshold shall be defined based on objective criteria specific to the market for the financial instrument concerned.

(a) the omission of the publication of the volume of an individual transaction during an extended time period of deferral not exceeding six months; or

Such temporary suspension shall be published on the website of the relevant competent authority and shall be notified to ESMA. ESMA shall also publish that temporary suspension on its website.

(b) the deferral of the publication of the details of several transactions in an aggregated form for six months.

ESMA may, in case of an emergency, such as a significant adverse effect on the liquidity of a class of bond, structured finance product or emission allowance traded in the Union, extend the maximum deferral durations set in accordance with the regulatory technical standards adopted pursuant to paragraph 4, point (d). Before deciding on such an extension, ESMA shall consult with any competent authority responsible for supervising one or more trading venues on which that class of bonds, structured finance products or emission allowances is traded. Such extension shall be published on the ESMA website.

ESMA shall publish on its website the list of the deferred publication related to sovereign debt instruments. ESMA shall monitor the application of those arrangements for deferred publication and shall submit an annual report to the Commission indication how they are used in practice.

The temporary suspension referred to in the first subparagraph or the extension referred to in the third subparagraph shall be valid for an initial period not exceeding three months from the date of its publication on the website of the relevant competent authority or ESMA, respectively. Such a suspension or extension may be renewed for further periods not exceeding three months at a time if the grounds for the temporary suspension or extension continue to be applicable.

When the deferral time period lapses, the outstanding details of the transaction and all the details of the transaction on an individual basis shall be published.

Before suspending or renewing the temporary suspension as referred to in the first subparagraph, the relevant competent authority shall notify ESMA of its intention and provide an explanation. ESMA shall issue an opinion to the competent authority as soon as practicable on whether in its view the suspension or the renewal of the temporary suspension is justified in accordance with the first and third subparagraphs.

4. ESMA shall develop draft regulatory technical standards to specify the following in such a way as to enable the publication of information required under this Article and under Article 27g:

3. In addition to the deferred publication as referred to in paragraph 1, the competent authority of a Member State may allow, with regard to transactions in sovereign debt instruments issued by that Member State:

(a) the details of transactions that investment firms, including systematic internalisers, and market operators and investment firms operating a trading venue shall make available to the public for each class of financial instrument concerned in accordance with Article 10(1), including identifiers for the different types of transactions published under Article10(1) and Article 21(1), distinguishing between those determined by factors linked primarily to the valuation of the financial instruments and those determined by other factors;

(a) the omission of the publication of the volume of an individual transaction for an extended time period not exceeding six months; or

(b) the time limit that would be deemed in compliance with the obligation to publish as close to real time as possible, including when trades are executed outside ordinary trading hours;

(b) the publication of the details of several transactions in an aggregated form for an extended time period not exceeding six months.

(c) for the purposes of determining the categories referred to in paragraph 1, the third subparagraph of this Article, what constitutes a transaction of a medium, large and very large size in a liquid and illiquid financial instrument as referred to in paragraph 1, third subparagraph, of this Article and in Article 21(1);

With regard to transactions in sovereign debt instruments not issued by a Member State, decisions in accordance with the first subparagraph shall be taken by ESMA.

(d) the price and volume deferrals applicable to each of the five categories set out in the paragraph 1, the third subparagraph, points (a)-(e), applying the following maximum durations:

ESMA shall publish on its website the list of deferrals allowed pursuant the first and second subparagraphs. ESMA shall monitor the application of those arrangements for deferred publication and shall submit a report every two years to the Commission on how they are used in practice.

When the deferral time period lapses, all the details of the transactions on an individual basis shall be published.

4. ESMA shall, after consulting the expert stakeholder group established by Article 22b, develop draft regulatory technical standards to specify the following in such a way as to enable the publication of information required under this Article and under Article 27g:

(a) the details of transactions that investment firms and market operators shall make available to the public for each class of financial instrument as referred to in paragraph 1 of this Article, including identifiers for the different types of transactions published under Article 10(1) and Article 21(1), distinguishing between those determined by factors linked primarily to the valuation of the financial instruments and those determined by other factors;

(b) the time limit that would be deemed in compliance with the obligation to publish as close to real time as technically possible including when trades are executed outside normal trading hours;

(ba) for which structured finance products or emission allowances traded on a trading venue a liquid market exists;

(bb) what constitutes a liquid and a illiquid market for bonds,, expressed as thresholds determined according to the issuance size of those bonds;

(c) what constitutes a transaction of a medium, large and very large size in a liquid and illiquid class of bond as referred to in paragraph 1a based on quantitative and qualitative analysis and taking into account the criteria in Article 2(1), point (17)(a), and other relevant criteria where applicable;

(d) with regards to classes of bonds, the price and volume deferrals applicable to each of the five categories set out in the paragraph 1a, third subparagraph, points (a) to (e), applying the following maximum durations:

(i) for transactions in category 1: a price deferral and a volume deferral not exceeding 15 minutes;

(ii) for transactions in category 2: a price deferral and a volume deferral not exceeding the end of the trading day;

(iii) for transactions in category 3: a price deferral not exceeding the end of the first trading day after the transaction date and a volume deferral not exceeding one week followingafter the transaction date;

(iv) for transactions in category 4: a price deferral not exceeding the end of the second trading day after the transaction date and a volume deferral not exceeding two weeks followingafter the transaction date;

(v) for transactions in category 5: a price deferral and a volume deferral not exceeding four weeks followingafter the transaction date.

For each of the categories set out under paragraph 1, the third subparagraph, points (a)-(e), ESMA shall regularly recalibrate the applicable deferral duration with the aim of gradually decreasing it where appropriate. Six months after the decreased deferral durations become applicable, ESMA shall perform a quantitative and qualitative review to assess the effects of the decrease. Where available, ESMA shall use the post-trade transparency data published by the consolidated tape for this purpose. If adverse effects to the financial instruments appear, ESMA shall increase the deferral duration back to the previous level.

(e) the arrangements for deferred publication with regards to structured financed products and emission allowances based on quantitative and qualitative analysis and taking into account the criteria in Article 2(1), point (17)(a), and other relevant criteria where applicable;

4b. ESMA shall submit the draft regulatory technical standards referred to in paragraph 4 to the Commission by ... [six months after the date of entry into force of this amending Regulation].

(f) the criteria to be applied when determining the size or type of a transaction in sovereign bonds for which the following is allowed under paragraph 3:

(i) omission of the publication of the volume of a transaction for an extended time period; or

(ii) publication of details of several transactions in an aggregated form.

For each of the categories set out under paragraph 1, third subparagraph, points (a) to (e), ESMA shall regularly update the draft regulatory technical standards referred to in the first subparagraph, point (d), of this paragraph in order to recalibrate the applicable deferral duration with the aim of gradually decreasing it where appropriate. No later than one year after the decreased deferral durations become applicable, ESMA shall perform a quantitative and qualitative analysis to assess the effects of the decrease. Where available, ESMA shall use the post-trade transparency data published by the consolidated tape for this purpose. If adverse effects to the financial instruments appear, ESMA shall update the draft regulatory technical standards referred to in the first subparagraph of this paragraph to increase the deferral duration back to the previous level.

ESMA shall submit the draft regulatory technical standards referred to in the first subparagraph to the Commission by ... [9 months after the date of entry into force of this amending Regulation].

Power is delegated to the Commission to supplement this Regulation by adopting the regulatory technical standards referred to in the first and second subparagraphs in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.’;

(10) the following article is inserted:

‘Article 11a Deferred publication for derivatives

1. Market operators and investment firms operating a trading venue may defer the publication of the details of transactions executed in respect of exchange-traded derivatives and in respect of OTC derivatives as referred to in Article 8a(2), including the price and the volume, in accordance with paragraphs 2 and 3.

Market operators and investment firms operating a trading venue shall clearly disclose the arrangements for deferred publication to market participants and the public. ESMA shall monitor the application of those arrangements for deferred publication and shall submit a report every two years to the Commission on how they are used in practice.

The arrangements for deferred publication shall be organised by using five categories of transactions related to a class of exchange-traded derivatives or of OTC derivatives as referred to in Article 8a(2):

(a) category 1: transactions of a medium size in a financial instrument for which there is a liquid market;

(b) category 2: transactions of a medium size in a financial instrument for which there is not a liquid market;

(c) category 3: transactions of a large size in a financial instrument for which there is a liquid market;

(d) category 4: transactions of a large size in a financial instrument for which there is not a liquid market;

(e) category 5: transactions of a very large size.

When the deferral time period lapses, all the details of the transactions on an individual basis shall be published.

2. The competent authority responsible for supervising one or more trading venues on which a class of exchange-traded derivatives or of derivatives as referred to in Article 8a(2) is traded may, where the liquidity of that class of financial instrument falls below the threshold determined in accordance with the methodology as referred to in Article 9(5), point (a), temporarily suspend the obligations referred to in Article 10. That threshold shall be defined based on objective criteria specific to the market for the financial instrument concerned.

Such temporary suspension shall be published on the website of the relevant competent authority and shall be notified to ESMA. ESMA shall also publish that temporary suspension on its website.

ESMA may, in case of an emergency, such as a significant adverse effect on the liquidity of a class of exchange-traded derivatives or of derivatives as referred to in Article 8a(2) traded in the Union, extend the maximum deferral durations set in accordance with the regulatory technical standards adopted pursuant to paragraph 3, point (e). Before deciding on such an extension, ESMA shall consult with any competent authority responsible for supervising one or more trading venues on which that class of exchange-traded derivatives or of derivatives as referred to in Article 8a(2), is traded. Such extension shall be published on the ESMA website.

The temporary suspension referred to in the first subparagraph or the extension referred to in the third subparagraph shall be valid for an initial period not exceeding three months from the date of its publication on the website of the relevant competent authority or ESMA, respectively. Such a suspension or extension may be renewed for further periods not exceeding three months at a time if the grounds for the temporary suspension or extension continue to be applicable.

Before suspending or renewing the temporary suspension as referred to in the first subparagraph, the relevant competent authority shall notify ESMA of its intention and provide an explanation. ESMA shall issue an opinion to the competent authority as soon as practicable on whether in its view the suspension or the renewal of the temporary suspension is justified in accordance with the first and third subparagraphs.

3. ESMA shall, after consulting the expert stakeholder group established by Article 22b, develop draft regulatory technical standards to specify the following in such a way as to enable the publication of information required under this Article and under Article 27g:

(a) the details of transactions that investment firms and market operators shall make available to the public for each class of derivatives as referred to in paragraph 1 of this Article, including identifiers for the different types of transactions published under Article10(1) and Article 21(1), distinguishing between those determined by factors linked primarily to the valuation of the derivatives and those determined by other factors;

(b) the time limit that would be deemed in compliance with the obligation to publish as close to real time as technically possible including when trades are executed outside ordinary trading hours;

(ba) for which derivatives a liquid market exists;

(c) what constitutes a transaction of a medium, large and very large size in a liquid or illiquid derivative as referred to in paragraph 1, third sub-paragraph, based on a quantitative and qualitative analysis and taking into account the criteria in Article 2(1), point (17)(a), and other relevant criteria where applicable;

(d) the price and volume deferrals applicable to each of the five categories set out in the paragraph 1, third subparagraph, points (a) to (e), based on a quantitative and qualitative analysis and taking into account the criteria in Article 2(1), point (17)(a), the size of the transaction and other relevant criteria where applicable.

For each of the categories set out under paragraph 1, third subparagraph, points (a) to (e), ESMA shall regularly update the draft regulatory technical standards referred to in the first subparagraph of this paragraph to recalibrate the applicable deferral duration with the aim of gradually decreasing it where appropriate. No later than one year after the decreased deferral durations become applicable, ESMA shall perform a quantitative and qualitative analysis to assess the effects of the decrease. Where available, ESMA shall use the post-trade transparency data published by the consolidated tape for this purpose. If adverse effects to the financial instruments appear, ESMA shall update the draft regulatory technical standards referred to in the first subparagraph of this paragraph to increase the deferral duration back to the previous level.

ESMA shall submit those draft regulatory technical standards to the Commission by ... [18 months after the date of entry into force of this amending Regulation].

Power is delegated to the Commission to supplement this Regulation by adopting the regulatory technical standards referred to in the first and second subparagraphs in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.

ESMA shall review the regulatory technical standards in conjunction with the expert stakeholder group under Article 22b and amend the standards to take into account substantial changes in calibration of categories under the first subparagraph point (d) and second subparagraph of this paragraph.’;

(11) in Article 12, paragraph 1 is replaced by the following:

‘1. Market operators and investment firms operating a trading venue shall make the information published in accordance with Articles 3, 4 and 6 to 11a available to the public by offering pre-trade and post-trade transparency data separately.’;

(12) Article 13 is replaced by the following:

‘Article 13 Obligation to make pre-trade data and post-trade data available on a reasonable commercial basis

1. Market operators and investment firms operating a trading venue, APAs and CTPs shall make available to the public the information published in accordance with Articles 3, 4, 6 to 11a, 14, 20, 21, 27g and 27h, on a reasonable commercial basis including unbiased and fair contractual terms.

Those market operators and investment firms, APAs and CTPs shall ensure non-discriminatory access to such information. The data policies of those market operators and investment firms, APAs and CTPs shall be made public free of charge in a manner which is easy to access and to understand.

2. Market operators and investment firms operating a trading venue and APAs shall make the information referred to in paragraph 1 available free of charge 15 minutes after publication in a format that is machine readable and utilisable for all users, including retail investors.

3. The reasonable commercial basis shall include the level of fees and other contractual terms. The level of fees shall be determined by the cost of producing and disseminating the information referred to in paragraph 1 and a reasonable margin.

4. Market operators and investment firms operating a trading venue, APAs and CTPs shall, upon request, provide their competent authority with information on the actual costs of producing and disseminating the information referred to in paragraph 1, including a reasonable margin.

5. ESMA shall develop draft regulatory technical standards to specify:

(a) what constitutes unbiased and fair contractual terms accordance with paragraph 1;

(b) what constitutes non-discriminatory access to data in accordance with paragraph 1;

(c) the uniform content, format and terminology of the data policies to be made public in accordance with paragraph 1;

(d) the data access, content and format of the information to be provided in accordance with paragraph 2;

(e) elements to be included in the calculation of cost and margin as referred to in paragraph 3;

(f) the uniform content, format and terminology of the information to be provided to the competent authorities in accordance with paragraph 4.

ESMA shall, every two years, monitor the developments in the cost of data and shall where appropriate update the regulatory technical standards in light of the result of its assessment.

ESMA shall submit those draft regulatory technical standards to the Commission by ... [nine months after the date of entry into force of this amending Regulation].

Power is delegated to the Commission to supplement this Regulation by adopting the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.’;

(7) ▌Article 13, is replaced by the following:

(13) Article 14 is amended as follows:

‘1. Market operators and investment firms operating a trading venue, APAs, CTPs and systematic internalisers shall make the information published in accordance with Article 3 and Article 4, Articles 6 to 11, and Articles 14, 20, 21, 27g and 27h, available to the public on a reasonable commercial basis and ensure non-discriminatory access to the information. Market operators and investment firms operating a trading venue, APAs and systematic internalisers shall make such information available free of charge 15 minutes after publication.

2. Providing data on a reasonable commercial basis means that the price of market data shall be based on the cost of producing and disseminating such data and may include a reasonable margin.

2a. Market operators and investment firms operating a trading venue, APAs, CTPs and systematic internalisers shall, upon request, provide the competent authorities and ESMA with information on the actual costs of producing and disseminating market data including the margins.

3. ESMA shall develop draft regulatory technical standards to:

(a) specify what constitutes a reasonable commercial basis, as well as the content, format and terminology of the reasonable commercial basis information that trading venues, APAs, CTPs and systematic internalisers have to make available to the public;

(b) specify the frequency, contact details and format of the information to be provided to the competent authorities and ESMA in accordance with paragraph 2a;

(c) identify the cost criteria of producing and disseminating market data resulting from trading activities and specify what constitutes a reasonable margin that market operators and investment firms operating a trading venue, APAs, CTPs and systematic internalisers shall follow to comply with Article 13(2).

ESMA shall regularly monitor the developments in market data costs and the levels of compliance with the rules, and shall regularly update its draft regulatory technical standards in light of the result of its assessment.

ESMA shall submit those draft regulatory technical standards to the Commission by [OP please insert XX months after entry into force].

Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.’;

(8) Article 14 is amended as follows:

(a) paragraphs 2 and 3 are replaced by the following:

‘2. This Article and Articles 15, 16 and 17 shall apply to systematic internalisers when they deal in sizes up to and including the threshold determined by ESMA in accordance with Article 4(6)(ea). Systematicthe internalisersregulatory shalltechnical notstandards beadopted subjectpursuant to this Article and Articles 15, 16 and 17 when theyparagraph deal7, inpoint sizes(b), aboveof thatthis threshold.Article.

3. Systematic internalisersThe ▌minimumminimum quotingquote size of systematic internalisers’ shall be determined byin ESMAthe inregulatory accordancetechnical withstandards adopted pursuant to paragraph 7.7, point (c). For a particular share, depositorydepositary receipt, ETF, certificate or other financial instrument that is similar to those financial instruments and that isinstrument traded▌traded on a trading venue, each quote shall include a firm bid and offer price, or firm bid and offer pricesprice for▌for a size or sizes which▌which could be up to the threshold determined by ESMA in accordance with paragraphthat 7.threshold. The price or prices shall▌shall reflect the prevailing market conditions for that share, depositary receipt, ETF, certificate or financial instrument that isother similar to those financial instruments.’;instrument ▌.’;

(b) the following paragraph 6a7 is inserted:replaced by the following:

‘6a.‘7. ESMAIn shall,order takingto intoensure considerationthe efficient valuation of shares, depositary receipts, ETFs, certificates and other similar financial instruments as welland asmaximise the provisionpossibility of favourableinvestment dealsfirms forto investmentobtain firmthe best deal for their clients, assessESMA theshall appropriatenessdevelop ofdraft theregulatory thresholdtechnical for:standards to specify:

(a) the arrangements for the publication of a firm quote as referred to in paragraph 1;

(b) the sizedetermination of the threshold below which this Article and Articles 15, 16 and 17 apply, which shall applytake tointo systematicaccount internalisersthe asinternational referredbest topractices, inthe paragraphcompetitiveness 2;of Union firms, the significance of the market impact and the efficiency of the price formation and which shall not be below twice the standard market size;

(c) the determination of the minimum quotingquote sizes as referred to in paragraph 3;3, which shall not exceed 90 % of the threshold referred to in point (b) and which shall not be below the standard market size;

(d) the determination of whether prices reflect prevailing market conditions as referred to in paragraph 3; and

(e) the standard market size as referred to in paragraph 4.

OnESMA theshall basissubmit ofthose thedraft assessmentregulatory referredtechnical tostandards into the first subparagraph, ESMA shall develop draftCommission regulatoryby technical... standards[12 tomonths modifyafter the thresholdsdate referredof toentry ininto pointsforce (a)-(e),of wherethis appropriate.amending Regulation].

ESMA shall submit those draft regulatory technical standards to the Commission by 31 December 2024.

Power is delegated to the Commission to supplement this Regulation by adopting the regulatory technical standards referred to in the first subparagraph accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.’;

Power is delegated to the Commission to supplement this Regulation by adopting the regulatory technical standards referred to in the second subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.’;

(14) Article 15 is amended as follows:

(ba)(a) in paragraph 7,1, the firstfollowing subparagraph is replaced by the following:added:

‘In order to ensure the efficient valuation of shares, depositary receipts, ETFs, certificates and other similar financial instruments and maximise the possibility of investment firms to obtain the best deal for their clients, ESMA shall develop draft regulatory technical standards to specify further the arrangements for the publication of a firm quote as referred to in paragraph 1, the determination of the minimum quoting sizes as referred to in paragraph 3, and of the standard market size as referred to in paragraph 4.’

‘Systematic internalisers shall establish and implement transparent and non-discriminatory rules and objective criteria for the efficient execution of orders. They shall have arrangements for the sound management of their technical operations, including the establishment of effective contingency arrangements to cope with risks of systems disruption.’;

(8a) Article 15 is amended as follows:

(a) in paragraph 1, the following subparagraphs are added:

‘Upon the request of competent authorities, systematic internalisers shall provide the competent authority with a detailed description of the functioning of the systematic internaliser, including any links to or participation by a regulated market, an MTF, an OTF or a systematic internaliser owned by the same investment firm.

Competent authorities shall make that information available to ESMA on request.

Systematic internalisers shall establish and implement transparent and non-discriminatory rules and objective criteria for the efficient execution of orders. They shall have arrangements for the sound management of their technical operations, including the establishment of effective contingency arrangements to cope with risks of systems disruption.’;

(b) paragraph 5 is replaced by the following:

‘5. ESMA shall develop draft implementing technical standards to determine the content and format of the description and notification referred to in paragraph 1.1, second subparagraph.

ESMA shall submit those draft implementing technical standards to the Commission by ... [six[12 months after the date of entry into force of this amending Regulation].

Power is conferred on the Commission to adopt the implementing technical standards referred to in the first subparagraph in accordance with Article 15 of Regulation (EU) No 1095/2010.’;

(8b) in(15) Article 16, points (a) and (b)16 areis replaced by the following:

‘(a) that firms that meet the definition of systematic internaliser comply with the conditions for order execution laid down in Article 15(1);

‘Article 16 Obligations of competent authorities

(b)The thatcompetent firmsauthorities shall check that meetsystematic internalisers comply with the definitionconditions offor systematicorder internaliserexecution complylaid down in Article 15(1) and with the conditions for price improvement laid down in Article 15(2).’;

(9)(16) Article 17a is replaced by the following:

‘Article 17a Tick sizes

Tick sizes

1. Systematic internalisers’ quotes, price improvements on those quotes and execution prices shall comply with the tick sizes set in accordance with Article 49 of Directive 2014/65/EU.

2. The applicationrequirements ofset theout tickin sizesArticle set15(2) inof accordancethis withRegulation and Article 49 of Directive 2014/65/EU2014/65/EU, shall not prevent systematic internalisers from matching orders ▌atat mid-pointmidpoint within the current bid and offer prices for sizes above the threshold determined by ESMA in accordance with Article 4(6)(ea).’;▌.’;

(9a) Article 18 is replaced by the following:

(17) Articles 18 and 19 are deleted;

‘Obligation for systematic internalisers to make public firm quotes in respect of bonds, structured finance products, emission allowances and derivatives

(18) Article 20 is amended as follows:

1. Investment firms shall make public firm quotes in respect of bonds, structured finance products, emission allowances traded on a trading venue and derivatives subject to the clearing obligation set out in Article 4 of Regulation (EU) No 648/2012, for which they are systematic internalisers and for which there is a liquid market when the following conditions are fulfilled:

(a) they are prompted for a quote by a client of the systematic internaliser;

(b) they agree to provide a quote.

2. Systematic internalisers may update their quotes at any time.

3. Member States shall require that firms that meet the definition of systematic internalisers notify their competent authority, specifying the financial instruments for which they meet the definition of systematic internaliser. Such notification shall be transmitted to ESMA within one working day.

ESMA shall establish a register of all systematic internalisers in the Union, including the details of systematic internalisers at the level of an individual financial instrument. That list shall be updated by ESMA without delay and within one working day of the competent authority transmitting to it a notification in accordance with the first subparagraph.

4. Systematic internalisers shall not be subject to this Article when they deal in sizes that are large in scale compared with the normal market size and as determined in accordance with Article 9(5)(c).

In respect of a package order and without prejudice to paragraph 2, the obligations in this Article shall only apply to the package order as a whole and not to any component of the package order separately.

5. The quotes published pursuant to paragraph 1 shall be made public in a manner which is easily accessible to other market participants on a reasonable commercial basis.

6. The quoted price or prices shall be such as to ensure that the systematic internaliser complies with its obligations under Article 27 of Directive 2014/65/EU, where applicable, and shall reflect prevailing market conditions in relation to prices at which transactions are concluded for the same or similar financial instruments on a trading venue.

However, in justified cases, they may execute orders at a better price provided that the price falls within a public range close to market conditions.’

(9b) in Article 19, paragraph 2 is deleted;

(9c) Article 20 is amended as follows:

(a) the following paragraph is inserted:

‘2a.‘1a. Each individual transaction shall be made public once through a single APA.’;

(b) in paragraph 3, point (c) is deleted;

(9d)(19) Article 21 is amended as follows:

(-a) the title is replaced by the following:

Post-trade disclosure by investment firms in respect of bonds, structured finance products, emission allowances and derivatives

(a) paragraph 1 is replaced by the following:

‘1. Investment firms which, either on own account or on behalf of clients, conclude transactions in bonds, structured finance products and emission allowances traded on a trading venue,venue or derivatives subject to the clearingOTC obligationderivatives setas outspecified in Article 4 of Regulation (EU) No 648/2012,8a(2), shall make public the volume and price of those transactions and the time at which they were concluded. That information shall be made public through an APA.’;

(b) paragraph 43 is replaced by the following:

‘4. Competent authorities shall be able to authorise investment firms to provide for deferred publication of price or volume on the same conditions as laid down in Articles 11.’;

‘3. The information which is made public in accordance with paragraph 1 and the time-limits within which it is published shall comply with the requirements adopted pursuant to Article 10, including the regulatory technical standards adopted in accordance with Article 11(4), points (a) and (b) and Article 11a(3), points (a) and (b).’;

(c) in paragraph 5, the introductory part4 is replaced by the following:

‘5. ESMA shall develop draft regulatory technical standards in such a way as to enable the publication of information required under Article 27h of this Regulation to specify the following:’;

‘4. With regards to bonds, structured finance products and emission allowances traded on a trading venue, investment firms may defer publication of price or volume on the same conditions as laid down in Article11.

(d) in paragraph 5, point (c) is deleted.;

4a. With regards to OTC derivatives as referred to in Article 8a(2), investment firms may defer publication of price or volume on the same conditions as laid down in 11a.’;

(9e) the following Article is inserted:

(d) in paragraph 5, the first subparagraph is amended as follows:

‘Article 21a

(i) the introductory wording is replaced by the following:

Designated reporting entity

‘5. ESMA shall develop draft regulatory technical standards in such a way as to enable the publication of information required under Article 27g to specify the following:’;

1. Where only one party to a transaction is a designated reporting entity in accordance with paragraph 3 of this Article, it shall be responsible for the disclosure of transactions through an APA in accordance with Article 20(1) or Article 21(1).

(ii) point (c) is deleted;

2. Where none of the parties to a transaction, or both of the parties to a transaction are designated reporting entities in accordance with paragraph 3, only the entity that sells the financial instrument concerned shall make the transaction public through an APA.

(20) the following article is inserted:

3. Upon request to ESMA, investment firms shall obtain the status of designated reporting entity for specific financial instruments or classes of financial instruments. All systematic internalisers shall be considered to be designated as reporting entities for the financial instruments or classes of financial instruments for which they are systematic internaliser.

‘Article 21a Designated publishing entities

4. ESMA shall establish a register of all designated reporting entities, specifying the identity of the designated reporting entities, including the systematic internalisers, as well as the instruments or classes of instruments for which they are designated reporting entities.’;

1. Competent authorities shall grant investment firms the status of designated publishing entity for specific classes of financial instruments, as requested by those investment firms. The competent authority shall communicate such requests to ESMA.

(9f) in Article 22(1), the introductory part is replaced by the following:

2. Where only one party to a transaction is a designated publishing entity in accordance with paragraph 1 of this Article, that party shall be responsible for making transactions public through an APA in accordance with Article 20(1) or Article 21(1).

‘In order to carry out calculations for determining the requirements for the pre- and post-trade transparency and the trading obligation regimes referred to in Articles 3 to 11, Articles 14 to 21 and Article 32, which are applicable to financial instruments and for determining whether an investment firm is a systematic internaliser, and to prepare annual reports to the Commission in accordance with Article 4(4), Article 9(2), Article 7(1) and Article 11(1), ESMA and competent authorities may require information from:’;

3. Where neither of the parties to a transaction, or both of the parties to a transaction are designated publishing entities in accordance with paragraph 1, only the entity that sells the financial instrument concerned shall be responsible for making the transaction public through an APA in accordance with Article 20(1) or Article 21(1).

(10) the following Articles 22a, 22b and 22c are inserted:

4. ESMA shall by ... [6 months after the data of entry into force of this amending Regulation] establish and regularly update a register of all designated publishing entities, specifying their identity and the classes of financial instruments for which they are designated publishing entities. ESMA shall publish that register on its website.’;

‘Article 22a Provision of market data to the CTP

(21) in Article 22(1), the introductory wording is replaced by the following:

1. Market data contributors shall, with regard to shares, ETFs and bonds that are traded on a trading venue, and with regard to OTC derivatives as defined in Article 2(7) of Regulation (EU) No 648/2012 that are subject to the clearing obligation as referred to in Article 4 of that Regulation, provide the CTP with all the market data as set out in the regulatory technical standarts referred to in Article 22b(2) as needed for the CTP to be operational. Those market data shall be provided in a harmonised format, through a high quality transmission protocol, and as close to real-time as is technically possible.

‘In order to carry out calculations for determining the requirements for the pre- and post-trade transparency and the trading obligation regimes referred to in Articles 3 to 11a, 14 to 21 and 32, which are applicable to financial instruments, and to prepare reports to the Commission in accordance with Article 4(4), Article 7(1), Article 9(2), Article 11(3) and Article 11a(1), ESMA and competent authorities may require information from:’;

1a. Regulated markets and SME growth markets whose average daily trading volume of shares represents less than 1 % of the average daily trading volume of the Union, and who do not form part of a market operator group that operates regulated markets that collectively represent more than 2% of the average daily trading volume in the Union, shall not be required to provide their market data to the CTP.

(22) the following articles are inserted:

1b. Regulated markets and SME growth markets whose average daily trading volume of shares exceeds 1 % of the average trading volume of the Union, and who do not form part of a market operator group that operates regulated markets that collectively represent more than 2% of the average daily trading volume in the Union, shall not be required to provide their market data to the CTP if:

‘Article 22a Transmission of ▌data to the CTP

(i) the regulated market or SME growth market accounts for more than 80% of the average daily trading volume of shares that were first admitted to trading on that regulated market or SME growth market; or

1. Trading venues and APAs (‘data contributors’) shall, with regard to shares, ETFs and bonds that are traded on a trading venue, and with regard to OTC derivatives as referred to in Article 8a(2) transmit to the data centre of the CTP as close to real-time as is technically possible the regulatory data and the data required under Article 3(1), without prejudice to Article 4, and under Article 6(1), Article 10(1), and Articles 20 and 21, and, where regulatory technical standards are adopted pursuant to Article 22b(3), point (a), in accordance with the requirements specified therein. Those ▌data shall be provided in a harmonised format, through a high quality transmission protocol ▌.

(ii) the average daily trading volume of shares first admitted on a regulated market on MTFs and systematic internalisers collectively is 20% or less of the average daily trading volume of those shares.

2. An investment firm operating a SME growth market, or a market operator, whose annual trading volume of shares represents 1 % or less of the annual trading volume of shares in the Union shall not be required to provide its data to the CTP if:

ESMA shall publish on its website a list of regulated markets exempted from providing their pre-trade market data to the CTP and shall update that list regularly.

(a) that investment firm or market operator is not a part of a group comprising or having close links with an investment firm or a market operator whose annual trading volume of shares represents more than 1 % of the annual trading volume of shares in the Union; or

1c. Notwithstanding paragraphs 1a and 1b, smaller regulated markets and SME growth markets may decide to provide their market data to the CTP, in accordance with paragraph 1, by notifying ESMA and the CTP. Those regulated markets that decide to subject themselves to the requirement to provide market data in accordance with paragraph 1 shall start providing market data to the CTP within 30 working days of the date of the notification to ESMA.

(b) the regulated market or SME growth market operated by that investment firm or market operator accounts for more than 85 % of the annual trading volume in shares that were initially admitted to trading on that regulated market or SME growth market.

2. Each CTP shall be free to choose, from among the types of connection and protocols that the market data contributors offer to other users, which connection and protocol it wishes to use for the provision of those data. Market data contributors shall not receive any remuneration for providing the connectivity other than the revenue sharing for shares, as specified in the conditions for appointment of the CTP in the selection process laid down in 27da.

3. Notwithstanding paragraph 2, an investment firm operating a SME growth market, or a market operator, that meets the conditions set out in that paragraph may decide to provide data to the CTP in accordance with paragraph 1, and in that case it shall notify ESMA and the CTP accordingly. Such investment firm or market operator shall start providing data to the CTP within 30 working days of the date of the notification to ESMA.

3. Market data contributors shall, with regard to transactions in the instruments referred to in paragraph 1 that are concluded by investment firms outside a trading venue, provide the CTP with the market data concerning those transactions through an APA. Market data providers shall, with regard to the best bids and offers in shares and ETFs provided by investment firms outside a trading venue, provide the CTP with the market data concerning those bids and offers either directly or through an APA.

4. ESMA shall publish on its website and keep up to date the list of investment firms operating SME growth markets and market operators that meet the conditions set out in paragraph 2, indicating also those who have decided to apply paragraph 3.

4. Market data contributors shall not receive any remuneration for the market data provided other than the revenue sharing as referred to in Article 27h(1), point (c).

5. Each CTP shall ▌choose, from among the types of transmission protocols that the ▌data contributors offer to other users, which transmission protocol is to be used for the direct transmission of the data referred to in paragraph 1 to the data centre of the CTP.

5. Each CTP shall apply the deferrals as laid down in Articles▌ 7, 11, ▌ 20 and 21 to the market data to be submitted to the CTP, and disseminate them in accordance with Articles 6, 10, 20 and 21.

6. Data contributors shall not receive any remuneration for providing the ▌data referred to in paragraph 1 and the transmission protocol referred to in paragraph 5 other than the revenue received under Article 27h(1a) and (5).

5a. Competent authorities shall monitor the data quality provided to the CTP by market data contributors. Where data quality is deemed insufficient, competent authorities shall take the necessary measures, including sanctions as provided by Article 70 of Directive 2014/65/EU and Title VIa, Chapter 2 of this Regulation.

7. Data contributors shall, where applicable, apply the deferrals laid down in Articles ▌ 7, 11, 11a, Article 20(2) and Article 21(4) to the data to be provided to the CTP.

Article 22b Market data quality

8. Where the CTP deems the quality of the data insufficient, it shall notify the competent authority of the data contributor to this effect. That competent authority shall take the necessary measures in accordance with Article 38g of this Regulation and Articles 69 and 70 of Directive 2014/65/EU.’;

1. The Commission shall set up an expert stakeholder group by [three months after the entry into force of this amending Regulation] to provide advice on the quality and the substance of core market data , in relation to the output of the consolidated tapes and the quality of the transmission protocol referred to in Article 22a(1). ESMA shall work closely with the expert stakeholder group, which shall provide advice on a yearly basis through a dedicated report. That report shall be made public.

Article 22b ▌ Data quality

1. The data provided to the CTP in accordance with Article 22a(1) and the data disseminated by the CTP in accordance with Article 27h(1), point (d), shall comply with the regulatory technical standards adopted in accordance with Article 4(6), point (a), Article 7(2), point (a), Article 11(4), point (a), and Article 11a(3), unless provided otherwise in the regulatory technical standards adopted in accordance with paragraph 3, points (a) and (b), of this Article.

2. The Commission shall establish an expert stakeholder group by ... [three months after the date of entry into force of this amending Regulation] to provide advice on the quality and the substance of ▌data ▌and the quality of the transmission protocol referred to in Article 22a(1). The expert stakeholder group and ESMA shall work closely together. The expert stakeholder group shall make its advice public.

The expert stakeholder group shall be composed of members with a sufficiently wide range of expertise, skills, knowledge and experience to provide adequate advice.

Members of the expert stakeholder group shall be selected following an open and transparent selection procedure. In selecting the members of the expert stakeholder group, the Commission shall ensure that they reflect the diversity of market participants across the Union.

The expert stakeholder group shall elect a Chair from among its members. The position of the Chair shall be held for a period of two years. The European Parliament may invite the Chair of the expert stakeholder group to make a statement before it and answer any questions from its members whenever so requested.

2.3. ESMA shall develop draft regulatory technical standards to specify, where necessary,specify the quality and the substance of the core market data,▌ the quality▌ of the transmission protocol, and measures to address erroneous trade reporting and enforcement standards in relation to data quality.quality, including arrangements regarding cooperation between data contributors and the CTP, and where necessary, the quality and the substance of the data for the operation of the consolidated tapes.

Those draft regulatory technical standards shall in particular specify all of the following:

(a) the content and the format of the core market data fields and the regulatory data fields, in accordance with prevailing industry standards and practices;

(a) minimum requirements for the quality of the transmission protocols referred to in Article 22a(5);

(b) any data fields required to be contributed to and by the CTP inpresentation additionof tothe core market data as referred to inbe Articledisseminated 2(1)(36b)by and▌the regulatoryCTP, datain asaccordance referredwith toprevailing inindustry Articlestandards 2(1)(36c);and practices;

(ba)(c) what constitutes the transmission of market data “as close to real time as technically possible”.possible”;

For the purposes of the first subparagraph, ESMA shall take into account the advice from ▌the ▌expert stakeholder group established in accordance with paragraph 1, international developments, and standards agreed at Union or international level. ESMA shall ensure that the draft regulatory technical standards take into account the reporting requirements laid down in Articles 3, 6, 8, 10, 14, 18, 20, 21 and 27g.

(d) where necessary, the data needed to be provided to the CTP to be operational, taking into account the advice of the expert stakeholder group referred to in paragraph 2 including the substance and the format of those ▌data, in accordance with prevailing industry standards and practices;

ESMA shall submit those draft regulatory technical standards to the Commission by [12 months after the date of entry into force of this amending Regulation].

For the purposes of the first subparagraph, ESMA shall take into account the advice from the ▌expert stakeholder group established in accordance with paragraph 2, international developments, and standards agreed at Union or international level. ESMA shall ensure that the draft regulatory technical standards take into account the reporting requirements laid down in Articles 3, 6, 8, 8a, 10, 11, 11a, 14, ▌ 20, 21 and 27g.

ESMA shall submit those draft regulatory technical standards to the Commission by ... [nine months after the date of entry into force of this amending Regulation].

Power is delegated to the Commission to supplement this Regulation by adopting the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.

Article 22c Synchronisation of business clocks

1. Trading venues and their members or participants, systematic internalisers, designated publishing entities, APAs and CTPs shall synchronise their business clocks to record the date and time of any reportable event.

2. ESMA shall, in accordance with international standards, develop draft regulatory technical standards to specify the level of accuracy to which clocks are to be synchronised.

ESMA shall submit those draft regulatory technical standards to the Commission by [OP insert... a[nine datemonths 6after monthsthe asdate of entry into force].force of this amending Regulation].

Power is delegated to the Commission to adoptsupplement this Regulation by adopting the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.’;

(11)(23) in Article 23, paragraph 1 is replaced by the following:

‘1. An investment firm shall ensure that the trades it undertakes in shares withwhich have an EEA International Securities Identification Number (ISIN) admittedand towhich tradingare traded on a regulatedtrading marketvenue shall take place on a regulated market, an MTF, a systematic internaliser or a third-country trading venue assessed as equivalent in accordance with Article 25(4), point (a)(a), of Directive 2014/65/EU, as appropriate, unless :unless:

(a) those shares are traded on a third-country venue in the local currency or in a non-EEA currency; or

(b) those trades are carried out between eligible counterparties, between professional counterparties or between eligible and professional counterparties and do not contribute to the price discovery process.process.’;

▌

(24) Article 25 is amended as follows:

(11a) Article 25 is amended as follows:

(a) paragraph 2 is replaced by the following:

‘2. The operator of a trading venue shall keep at the disposal of the competent authority, for at least five years, the relevant data relating to all orders in financial instruments which are advertised through their systems in an electronic and machine-readable format and using a common template in accordance with the ISO 20022 methodology.template. The records shall contain the relevant data that constitute the characteristics of the order, including those that link an order with the executed transaction(s) that stems from that order and the details of which shall be reported in accordance with Article 26(1) and (3). ESMA shall perform a facilitation and coordination role in relation to the access by competent authorities to information under this paragraph.’;

(b) in paragraph 3, the first subparagraph is replaced by the following:

‘ESMA shall develop draft regulatory technical standards to specify the details and formats of the relevant order data that are required to be maintained under paragraph 2 of this Article and that isare not referred to in Article 26.’26.’;

(11b) in Article 26, paragraph 1 is replaced by the following:

(25) Article 26 is amended as follows:

‘1. Investment firms which execute transactions in financial instruments shall report complete and accurate details of such transactions to the competent authority as quickly as possible, and no later than the close of the following working day.

(a) in paragraph 1, the second and third subparagraphs are replaced by the following:

The‘The competent authorities shall, in accordance with Article 85 of Directive 2014/65/EU, establish the necessary arrangements in order to ensure that the competent authority offollowing relevantcompetent marketsauthorities also receive that information.information:

The competent authorities shall without undue delay make available to ESMA any information reported in accordance with this Article.

(i) the competent authority of the most relevant market in terms of liquidity for those financial instruments;

1a. By ... [12 months after the date of entry into force of this amending Regulation], the Commission shall, in close cooperation with ESMA, assess the possibility of extending the requirements of this Article to AIFMs as defined in Article 4(1), point (b) of Directive 2011/61/EU, and management companies, as defined in Article 2.1b of Directive 2009/65/EC, which provide investment services and activities, as defined in Article 4(1), point (2) of Directive 2014/65/EU and which execute transactions in financial instruments. In particular, the Commission shall include a cost-benefit analysis and an evaluation of the scope of such extension.

(ii) the competent authorities responsible for the supervision of the transmitting investment firms;

On the basis of that assessment and taking into account the goals of the capital markets union, the Commission is empowered to adopt delegated acts in accordance with Article 50 to amend this Regulation by extending the requirements of this Article as set out in the first subparagraph.’;

(iii) the competent authorities responsible for the supervision of the branches which have been part of the transaction; and

(11c) in Article 26(2), the first subparagraph is replaced by the following:

(iv) the competent authority responsible for the supervision of the trading venues used.

‘The obligation laid down in paragraph 1 shall apply to:

The competent authority referred to in the first subparagraph shall without undue delay make available to ESMA any information reported in accordance with this Article.’;

(a) financial instruments which are admitted to trading or traded on a trading venue or for which a request for admission to trading has been made;

(b) paragraph 2 is replaced by the following:

(b) financial instruments where the underlying is a financial instrument traded on a trading venue;

2. The obligation laid down in paragraph 1 shall apply to:

(c) financial instruments where the underlying is an index or a basket composed of financial instruments traded on a trading venue; and

(a) financial instruments which are admitted to trading or traded on a trading venue or for which a request for admission to trading has been made, irrespective of whether or not such transactions are carried out on the trading venue, with exception of transactions in OTC derivatives other than those referred in Article 8a(1a), to which the obligation shall apply only when executed on a trading venue;

(ca) derivatives subject to the clearing obligation set out in Article 4 of Regulation (EU) No 648/2012 executed outside a trading venue.’;

(b) financial instruments where the underlying is a financial instrument traded on a trading venue, irrespective of whether or not such transactions are carried out on the trading venue;

(11d) in Article 26, paragraph 3 is replaced by the following:

(c) financial instruments where the underlying is an index or a basket composed of financial instruments traded on a trading venue, irrespective of whether or not such transactions are carried out on the trading venue;

‘3. The reports shall, in particular, include details of the names and numbers of the financial instruments bought or sold, the quantity, the dates and times of execution, the transaction prices, a designation to identify the parties on whose behalf the investment firm has executed that transaction, a designation to identify the persons and the computer algorithms within the investment firm responsible for the investment decision and the execution of the transaction, a designation to identify the entity subject to the reporting obligation, a designation to identify the applicable waiver under which the trade has taken place and means of identifying the investment firms concerned. Reports on a transaction made at the trading venue shall include a transaction identification code generated and disseminated by the trading venue to both buying and selling members of the trading venue. For transactions not carried out on a trading venue, the reports shall include a designation identifying the types of transactions in accordance with the measures to be adopted pursuant to Article 20(3)(a) and Article 21(5)(a). For commodity derivatives, the reports shall indicate whether the transaction reduces risk in an objectively measurable way in accordance with Article 57 of Directive 2014/65/EU.’;

(d) OTC derivatives referred to in Article 8a(2), irrespective of whether or not such transactions are carried out on the trading venue;

(11e) in Article 26,(c) paragraph 53 is replaced by the following:

‘5. The operator of a trading venue shall report details of transactions in financial instruments traded on its platform which are executed through its systems by any member, participant or user not subject to this Regulation in accordance with paragraphs 1 and 3.’;

‘3. The reports shall, in particular, include details of the names and numbers of the financial instruments bought or sold, the quantity, the dates and times of execution, the effective dates, the transaction prices, a designation to identify the parties on whose behalf the investment firm has executed that transaction, a designation to identify the persons and the computer algorithms within the investment firm responsible for the investment decision and the execution of the transaction, a designation to identify the entity subject to the reporting obligation, and means of identifying the investment firms concerned. Reports on a transaction made at the trading venue shall include a transaction identification code generated and disseminated by the trading venue to both buying and selling members of the trading venue.

(11f) in Article 26(6), the first subparagraph is replaced by the following:

For transactions not carried out on a trading venue, the reports shall include a designation identifying the types of transactions in accordance with the measures to be adopted pursuant to Article 20(3), point (a), and Article 21(5), point (a). For commodity derivatives, the reports shall indicate whether the transaction reduces risk in an objectively measurable way in accordance with Article 57 of Directive 2014/65/EU.’;

‘In reporting the designation to identify the clients as required under paragraphs 3 and 4, investment firms shall use an ISO 17442 legal entity identifier code established to identify parties that are eligible for the code. The code shall be used to identify eligible parties regardless of their legal status and the way in which they are financed. For parties that are not eligible for the code, a national identifier established to identify parties that are not eligible for the legal entity identifier code shall be used.’;

(d) paragraph 5 is replaced by the following:

(12) Article 26(9) is amended as follows:

‘5. The operator of a trading venue shall report details of transactions in financial instruments traded on its platform which are executed through its systems by any member, participant or user which is not subject to this Regulation in accordance with paragraphs 1 and 3.’;

▌

(e) in paragraph 8, the following subparagraph is inserted before the first subparagraph:

(a) the first subparagraph is amended as follows:

‘An investment firm shall report transactions executed wholly or partly through its branch to the competent authority of the home Member State of the investment firm. The branch of a third country firm shall submit its transaction reports to the competent authority which authorised the branch. Where a third country firm has set up branches in more than one Member State, those branches shall define the competent authority that is to receive all the transaction reports.’;

(i) point (c) is replaced by the following:

(f) paragraph 9 is amended as follows:

‘(c) the references of the financial instruments bought or sold, the quantity, the dates and times of execution, the transaction prices, the information and details of the identity of the client, a designation to identify the clients on whose behalf the investment firm has executed that transaction, a designation to identify the persons and the computer algorithms within the investment firm responsible for the investment decision and the execution of the transaction, a designation to identify the applicable waiver under which the trade has taken place, the means of identifying the investment firms concerned, the way in which the transaction was executed, data fields necessary for the processing and analysis of the transaction reports in accordance with paragraph 3;’;

(i) the first subparagraph is amended as follows:

(ii) point (d) is deleted;

– point (c) is replaced by the following:

(iii) point (e) is replaced by the following:

‘(c) the references of the financial instruments bought or sold, the quantity, the dates and times of execution, the effective dates, the transaction prices, the information and details of the identity of the client, a designation to identify the parties on whose behalf the investment firm has executed that transaction, a designation to identify the persons and the computer algorithms within the investment firm responsible for the investment decision and the execution of the transaction, the means of identifying the investment firms concerned, the way in which the transaction was executed, data fields necessary for the processing and analysis of the transaction reports in accordance with paragraph 3;’;

– point (d) is deleted;

– point (e) is replaced by the following:

‘(e) the relevant categories of indices to be reported in accordance with paragraph 2;’;

(iv)– the following points are added:

‘(ia)‘(j) the conditions for linking specific transactions and the means of the identification of aggregated orders resulting in the execution of a transaction; and

(ib)(k) the date by which transactions are to be reported.’;

(b)(ii) the second subparagraphand isthird subparagraphs are replaced by the following:

‘ESMA shall submit those draft regulatory technical standards to the Commission by ... [3 years after the date of entry into force of this amending Regulation].’;

‘When developing those regulatory technical standards, ESMA shall take into account international developments and standards agreed upon at Union or global level, and the consistency of those draft regulatory technical standards with the reporting requirements laid down in Regulation (EU) No 648/2012 and Regulation (EU) 2015/2365.

(13) in Article 26, the following paragraph 11 is added:

ESMA shall submit those draft regulatory technical standards to the Commission by ... [18 months after the date of entry into force of this amending Regulation].

‘11. By [OP insert date 2 years as of date of publication], ESMA shall submit to the Commission a report for the development of an integrated collection of transaction reporting data and for the streamlining of data flows under Article 26 of this Regulation to:

Power is delegated to the Commission to supplement this Regulation by adopting the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.’;

(a) reduce duplicative or inconsistent requirements for transaction data reporting, and in particular duplicative or inconsistent requirements laid down in this Regulation, Regulation (EU) 2019/834 of the European Parliament and of the Council*1 , Regulation (EU) 2015/2365, and in other legislation of the financial industry;

(g) the following paragraph is added:

(b) improve data standardisation and efficient sharing and use of data reported within any Union reporting framework by any relevant competent authority, both Union and national.

‘11. By [four years after the date of entry into force of this amending Regulation], ESMA shall submit to the Commission a report assessing the feasibility of more integration in transaction reporting and streamlining of data flows under Article 26 of this Regulation to:

When preparing the report, ESMA shall, where relevant, work in close cooperation with the other bodies of the European System of Financial Supervision and the European Central Bank.

(a) reduce duplicative or inconsistent requirements for transaction data reporting, and in particular duplicative or inconsistent requirements laid down in this Regulation ▌, Regulation (EU) No 648/2012 and Regulation (EU) 2015/2365, and in other relevant Union law;

________________________________________________________

(b) improve data standardisation and efficient sharing and use of data reported within any Union reporting framework by any relevant Union or national competent authority ▌.

*1 Regulation (EU) 2019/834 of the European Parliament and of the Council of 20 May 2019 amending Regulation (EU) No 648/2012 as regards the clearing obligation, the suspension of the clearing obligation, the reporting requirements, the risk-mitigation techniques for OTC derivative contracts not cleared by a central counterparty, the registration and supervision of trade repositories and the requirements for trade repositories (OJ L 141, 28.5.2019, p. 42)’;

When preparing the report, ESMA shall, where relevant, work in close cooperation with the other bodies of the European System of Financial Supervision and the European Central Bank.’;

(14)(26) Article 27▌27 is▌is amended as follows:

(-a)(a) in paragraph 1, the first and second subparagraphs are replaced by the following:

‘With regard to financial instruments admitted to trading or traded on a trading venue or concluded on a trading venue or where the issuer has approved trading of the issued instrument or where a request for admission to trading has been made, trading venues shall provide ESMA with identifying reference data for the purpose of transaction reporting under Article 26 and of the transparency requirements under Articles 3, 6, 8, 8a, 10, 11, 11a, 14, 20 and 21.

With regard to OTC derivatives, identifying reference data shall be based and further developed on a globally agreed internationalunique standardproduct usedidentifier forand identifyingon referenceany dataother asrelevant derivativeidentifying identifiers.’;data.

(a) paragraph 3 is amended as follows;

With regard to OTC derivatives not covered by the first subparagraph that fall within the scope of Article 26(2), each designated publishing entity, , shall provide ESMA with the identifying reference data.’;

(i) the following point (c) is added:

(b) paragraph 3 is amended as follows:

‘(c) the date by which reference data are to be reported’.

(i) the following point ▌ is added:

‘(c) the date by which reference data are to be reported.’;

(ii) the following subparagraph is inserted after the first subparagraph:

‘When drafting those draft regulatory technical standards, ESMA shall take into account international developments and standards agreed upon at Union or global level, and the consistency of those draft regulatory technical standards with the reporting requirements laid down in Regulation (EU) 2019/834No 648/2012 and Regulation (EU) 2015/2365.’;

(14a) Article 27d is amended as follows:

(c) the following paragraph is added:

‘5. By ... [three months after the date of entry into force of this amending Regulation], the Commission shall adopt a delegated act in accordance with Article 50 in order to supplement this Regulation by specifying the identifying reference data to be used with regards to OTC derivatives for the purposes of the transparency requirements set out in Articles 8a(1a), 10 and 21.’;

The Commission is empowered to adopt delegated acts in accordance with Article 50 in order to supplement this Regulation by specifying the identifying reference data to be used with regards to OTC derivatives for the purposes of Article 26.

(27) Article 27d is amended as follows:

(a) the title is replaced by the following:

‘Article 27d

‘Procedures for granting and refusing applications for authorisation of ARMs and APAs’;

Procedures for granting and refusing applications for authorisation for ARMs and APAs’;

(b) paragraphs 1, 2 and 3 are replaced by the following:

(b) paragraphs 1-3 are replaced by the following:

‘1. The applicant APA or ARM shall submit an application providing all information necessary to enable ESMA, or the national competent authority where relevant, to confirm that the APA or ARM has established, at the time of initial authorisation, all the necessary arrangements to meet its obligations under the provisions of this Title, including a programme of operations setting out, inter alia, the types of services envisaged and the organisational structure.

After assessing an application as complete, ESMA, or the national competent authority where relevant, shall notify the APA or ARM accordingly.

3. ESMA, or the national competent authority where relevant, shall, within six months from the receipt of a complete application, assess the compliance of the APA or ARM with this Title. It shall adopt a fully reasoned decision granting or refusing authorisation and shall notify the applicant APA or ARM accordingly within five working days.’;

(15) the following Article 27da is inserted:

(c) in paragraph 4, point (b) is replaced by the following:

‘Article 27da Process for the selection of a single CTP for each asset class

‘(b) the information included in the notifications under Article 27f(2) as regards APAs and ARMs.’;

1. By [OP insert date 3 months as of entry into force], ESMA shall organise a selection procedure for the appointment of the CTP for a five year term. ESMA shall organise a separate selection procedure for ▌ the following asset classes, in the following order:

(d) in paragraph 5, the first subparagraph is replaced by the following;

‘ESMA shall develop draft implementing technical standards to determine standard forms, templates and procedures for the notification or provision of information provided for in paragraph 1 of this Article and in Article 27f(2) as regards for APAs and ARMs.’;

(28) the following articles are inserted:

‘Article 27da Procedure for the selection of a single CTP for each asset class

1. For each of the following asset classes, ESMA shall organise a separate selection procedure for the appointment of a single CTP for a period of five years:

(a) bonds;

(b) shares and ETFs; and

(c) derivatives.

(c) OTC derivatives ▌or relevant subclasses of OTC derivatives▌.

Each selection procedure shall be initiated no later than six months following the initiation of the preceding one.

ESMA shall initiate the first selection procedure under the first subparagraph, point (a), by ... [nine months after the date of entry into force of this amending Regulation].

2. For each of the asset classes referred to in paragraph 1, ESMA shallselect the applicant for subsequent authorisation on the basis of the following criteria:

ESMA shall initiate the first selection procedure under the first subparagraph, point (b), within six months of the initiation of the selection procedure under the first subparagraph, point (a).

(a) the technical ability of the applicants to provide a resilient consolidated tape throughout the Union;

ESMA shall initiate the first selection procedure under the first subparagraph, point (c), within three months of the application of the delegated act referred to in Article 27(5) and not earlier than six months after the initiation of the selection procedure under point (b).

(b) the capacity of the applicants to comply with the organisational requirements laid down in Article 27h;

ESMA shall initiate subsequent selection procedures under the first subparagraph, points (a), (b) and (c), in time to allow the provision of the consolidated tape to continue without disruption.

(ba) the ability to receive, consolidate and disseminate pre-trade and post-trade market data for shares and ETFs, up to the first five layers of the order books, and post-trade data for bonds and derivatives;

2. For each of the asset classes referred to in paragraph 1, ESMA shall select the applicant deemed suitable for operating the consolidated tape on the basis of the following criteria:

(c) the adequacy of the governance structure of the applicants;

(a) the technical ability of the applicant to provide a resilient consolidated tape throughout the Union;

(d) the adequacy of the speed at which the applicants can disseminate core market data;

(b) the capacity of the applicant to comply with the organisational requirements laid down in Article 27h;

(e) the appropriateness of the applicant’s methods and arrangements to ensure data quality;

(c) the ability of the applicant to receive, consolidate and disseminate, as applicable, pre-trade and post-trade data for shares and ETFs and post-trade data for bonds and OTC derivatives;

(f) the reasonable level of total expenditure needed by the applicants to develop the consolidated tape and the costs of operating the consolidated tape on an ongoing basis;

(d) the adequacy of the governance structure of the applicant;

(g) the level of the fees that the applicant intends to charge to the different types of users of the core market data, their proportionality to the costs incurred for running the CTP, the simplicity of its fee and licensing models, and the applicant’s ultimate ability to cover costs and generate a reasonable margin in line with the requirements of Article 13;

(e) the speed at which the applicant can disseminate core market data;

(h) the possibility of the applicants to use modern interface technologies for the provision of the core market data and for connectivity;

(f) the appropriateness of the applicant’s methods and arrangements to ensure data quality;

(i) the appropriateness of the arrangements in place to preserve records for the purposes of Article 27ha(3);

(g) the total expenditure needed by the applicant to develop the consolidated tape and the costs of operating the consolidated tape on an ongoing basis;

(j) the ability to ensure regularity, resilience and business continuity, and the process the applicants intend to put in place to mitigate and address cyber-risk;

(h) the level of the fees that the applicant intends to charge to the different types of users of the core market data, the simplicity of its fee and licensing models, and compliance with Article 13;

(k) the process the applicants intend to put in place to mitigate the energy consumption generated by the storage of data.

(ha) for the consolidated tape for bonds, the existence of a scheme for revenue distribution as described in Article 27h(1a);

3. For the selection of the CTP for shares and ETFs, in addition to the criteria in paragraph 2 of this Article, ESMA shall consider the revenue redistribution scheme that the applicant intends to put in place in relation to each market data contributor, and in particular the formula applicable to smaller regulated markets and SME growth markets that decide to provide their market data to the CTP, in accordance with Article 22a(1c).

(i) the use of modern interface technologies by the applicant for the provision of the core market data and for connectivity;

4. Within six months from the initiation of the selection procedure referred to in paragraph 1, ESMA shall adopt a fully reasoned decision selecting entities deemed suitable for operating the consolidated tapes and inviting them to submit an application for authorisation.

(j) the appropriateness of the arrangements put in place by the applicant to preserve records for the purposes of Article 27ha(3);

▌

(k) the ability of the applicant to ensure resilience and business continuity, and the process that the applicant intends to put in place to mitigate and address outages and cyber-risk;

▌

(l) the process the applicant intends to put in place to mitigate the energy consumption generated by the collection, processing and storage of data;

▌

(m) where an application is submitted by joint applicants, the necessity, in terms of technical and logistical capacity, for each of the applicants to apply jointly.

(15a) the following Article is inserted:

3. The applicant shall provide all the information necessary to enable ESMA to confirm that the applicant has put in place, at the time of the application, all the necessary arrangements to fulfil the criteria set out in paragraph 2 of this Article and to comply with the organisational requirements set out in Article 27h.

‘Article 27db

4. Within six months from the initiation of each selection procedure referred to in paragraph 1, ESMA shall adopt a reasoned decision selecting the applicant deemed suitable for operating the consolidated tape and inviting it to submit without undue delay an application for authorisation.

Process for the authorisation of CTPs

5. Where no applicant has been selected under this Article or authorised under Article 27db, ESMA shall initiate a new selection procedure within six months from the end of the unsuccessful selection or authorisation procedure.

1. The application referred to in Article 27da shall provide all the information necessary to enable ESMA to confirm that the applicant has put in place, at the time of initial authorisation, all the necessary arrangements to fulfil the criteria set out in Article 27da(2) and to comply with the organisational requirements set out in Article 27h.

Article 27db Procedures for granting and refusing applications for authorisation of CTPs

ESMA shall assess whether the application for authorisation is complete within 20 working days of its receipt.

1. The applicant for authorisation referred to in Article 27da(4) shall provide all the information necessary to enable ESMA to confirm that the applicant has put in place, at the time of the application for authorisation, all the necessary arrangements to fulfil the criteria set out in Article 27da(2).

Where the application is not complete, ESMA shall set a deadline by which the applicant is to provide additional information.

2. ESMA shall assess whether the application for authorisation is complete within 20 working days of its receipt.

After assessing the application as complete, ESMA shall notify the CTP accordingly. Within three months from the receipt of a complete application, ESMA shall assess the compliance of the applicant with this Title. It shall adopt a fully reasoned decision granting or refusing authorisation and shall notify the applicant accordingly within five working days of the date of adoption of such reasoned decision. Such reasoned decision shall specify the conditions under which the CTP shall operate and, in particular, the level of fees referred to in Article 27da(2)(g), as indicated by the applicant, and, for shares, the level of the participation as referred to in Article 27h(1), point (c).

Where the application for authorisation is not complete, ESMA shall set a deadline by which the applicant is to provide additional information.

2. Once authorised by ESMA, the CTP shall be granted a transition period of three months to ensure the operational and technical set-up in accordance with the respective regulatory technical standards before the consolidated tape begins to operate. During this transition period, the CTP shall allow data providers to connect and test the connection to the CTP for data contribution.

After assessing the application for authorisation as complete, ESMA shall notify the applicant accordingly.

3. The selected CTPs shall comply at all times with the organisational requirements set out in Article 27h and with the conditions set out in the decision of ESMA authorising the CTP referred to in paragraph 1, fourth subparagraph of this Article. A CTP that is no longer able to comply with those requirements and conditions, including the requirements and conditions on system disruptions and intrusions, shall inform ESMA thereof without undue delay.

3. Within three months of the receipt of a complete application for authorisation, ESMA shall assess the compliance of the applicant with this Title. ESMA shall adopt a reasoned decision granting or refusing authorisation and shall notify the applicant accordingly within five working days of the date of adoption of such reasoned decision. Such reasoned decision shall specify the conditions under which the applicant shall operate.

4. The withdrawal ofFollowing the authorisation referredin toaccordance inwith Articleparagraph 27e3, shallESMA onlymay takegrant effectthe whenapplicant aauthorised newas CTP hasa beentransition selectedperiod andto authorisedput in accordanceplace withthe Articlesnecessary 27daoperational and 27db.technical set-up.

5. ESMA shall develop draft regulatory technical standards to determine:

5. The CTP shall comply at all times with the ▌requirements set out in Article 27h and with the conditions set out in the reasoned decision of ESMA authorising the CTP referred to in paragraph 3 of this Article.

(a) the information to be provided under paragraph 1, including the programme of operations;

A CTP that is no longer able to comply with those requirements and conditions referred to in the first subparagraph, shall inform ESMA thereof without undue delay.

(b) the information included in the notifications under Article 27f(2).

6. The withdrawal of the authorisation referred to in Article 27e shall only take effect once a new CTP has been selected and authorised for the asset class concerned in accordance with Articles 27da and 27db.

7. ESMA shall develop draft regulatory technical standards to determine:

(a) the information to be provided under paragraph 1;

(b) the information included in the notifications under Article 27f(2) as regards CTPs.

ESMA shall submit those draft regulatory technical standards to the Commission by ... [nine months after the date of entry into force of this amending Regulation]

Power is delegated to the Commission to supplement this Regulation by adopting the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.

6.8. ESMA shall develop draft implementing technical standards to determine standard forms, templates and procedures for the notification or provision of information provided for in paragraph 1 of this Article and in Article 27f(2).27f(2) as regards CTPs.

Power is conferred on the Commission to adopt the implementing technical standards referred to in the first subparagraph in accordance with Article 15 of Regulation (EU) No 1095/2010.

ESMA shall submit those draft implementing technical standards to the Commission by ... [nine months after the date of entry into force of this amending Regulation].

(15b) In Article 27e, the following paragraph is inserted:

Power is conferred on the Commission to adopt the implementing technical standards referred to in the first subparagraph in accordance with Article 15 of Regulation (EU) No 1095/2010.’;

‘2a. A data reporting services provider from which registration has been withdrawn shall ensure orderly substitution, including the transfer of data to other data reporting services providers, the due notice to its clients and the redirection of reporting flows to other data reporting services providers prior to the withdrawal.’;

(29) in Article 27e, the following paragraph is added:

(15c) Article 27f is amended as follows:

‘3. A data reporting services provider from which authorisation has been withdrawn shall ensure orderly substitution, including the transfer of data to other data reporting services providers, the due notice to its clients and the redirection of reporting flows to other data reporting services providers prior to the withdrawal.’;

(a)(30) in paragraph 1,Article the27f, thirdparagraph subparagraph4 is replaced by the following:

‘Where a market operator seeks authorisation to operate an APA or an ARM pursuant to Article 27c, where if it fulfils the criteria for derogation of ESMA supervision and where the members of the management body of the APA, or the ARM are the same as the members of the management body of the regulated market, those persons are deemed to comply with the requirements laid down in the first subparagraph.’;

(b) paragraph 4 is replaced by the following:

‘4. ESMA, or the national competent authority where relevant, shall refuse or withdraw authorisation if it is not satisfied that the person or persons who effectively direct the business of the data reporting services provider are of sufficiently good repute, or if there are objective and demonstrable grounds for believing that proposed changes to the management body of the data reporting services provider pose a threat to its sound and prudent management and to the adequate consideration of the interest of its clients and the integrity of the market.’;

(c) the following paragraphs are inserted:

(31) Article 27g is amended as follows:

(a) the following paragraphs are inserted:

‘4a. An APA shall have objective, non-discriminatory and publicly disclosed requirements for access to its services by undertakings that are subject to the transparency obligations under Article 20(1) and Article 21(1).

An APA shall publicly disclose the prices and fees associated with the data reporting services provided under this Regulation. It shall disclose separately the prices and fees of each service provided, including discounts and rebates and the conditions to benefit from those reductions.them. It shall allow reporting entities to access specific services separately.

4b. APAs shall keep and preserve records relating to their business for at least five years. The information concerning the first two yearsAPAs shall be kept inpromptly anmake easilythose accessiblerecords place,available andto the APA shall providerelevant suchcompetent recordsauthority toor ESMA without delay upon request.’;

(16) Article 27h is replaced by the following:

(b) paragraph 7 is deleted;

‘Article 27h

(32) Article 27h is replaced by the following:

‘Article 27h Organisational requirements for CTPs

1. CTPs shall, in accordance with the conditions for authorisation referred to in Article 27da:

(a) collect all market data provided through contributions in relation to the asset class for which they are authorised;

(b) collect monthly subscription▌ fees from users,subscribers, while providing free access to retail investors, academics andacademics, civil society organisations using the data for research purposes as well as public authorities for the execution of regulatory and supervisorycompetent competences;authorities;

(c) in the case of market data concerning shares and ETFs, redistribute part of their revenues for the purposes of covering the cost related to mandatory contribution and, when applicable, of ensuring a reasonable level of participation for regulated markets and SME Growth Markets, in particular smaller regulated markets, in the▌ revenue generated by the consolidated tape,▌ in accordance with Articleparagraph 27da(3);5;

(d) make consolidateddisseminate core market data, for the provision of which the CTP is selected in accordance with Article 27da, available in accordance with the data quality requirements set out inand Articleregulatory 22bdata to users intoas a continuous electronic data stream on non-discriminatory terms as close to real time as technically possible;

▌

(e) ▌ ensure that the consolidated core market data is easily accessible, machine readable and utilisable for all users, including retail investors;

(f) ensure that the consolidated core market data is easily accessible, machine readable and utilisable for all users, including retail investors.

(f) have systems in place that can effectively check the completeness of the data provided, identify obvious errors, and request the re-submission of data;

(fa) ensure that the use of core market data is strictly limited to the collection, consolidation, and redistribution of such data; any additional value-added services shall be subject to additional licensing terms set out by each market data contributor;

(g) where the CTP is controlled by a group of economic operators, have a compliance system in place to ensure that the operation of the consolidated tape does not result in a distortion of competition.

(fb) have systems in place that can effectively check trade reports for completeness, identify omissions and obvious errors, and request the re-transmission of erroneous reports.

For the purposes of the first subparagraph, point (d), the CTP for shares and ETFs shall not publish the market identifier code when disseminating best bids and offers as close as to real time as technically possible to the public.

▌For the purposes of point (c), the level of revenue redistributed to each market data contributor shall take into account the contribution to the price formation process of the data provided to the CTP by that market data contributor in accordance with Article 22a.

2. CTPs shall adopt, publish on their website and regularly update service level standards covering all of the following:

Smaller regulated markets and SME Growth Markets, independent and not part of any bigger exchange group, shall benefit from a more important remuneration in order to incentivize their contribution to the CTP.

(a) an inventory of ▌ data contributors from whom market data are received;

Revenue generated from pre-trade and post-trade consolidated data streams shall be redistributed exclusively to the contributors to a given data stream.

1a. ESMA shall develop draft regulatory technical standards to specify the features of the revenue redistribution scheme aimed at remunerating market data providers, such as the maximum amount per user of the consolidated tape that would contribute to the revenue redistribution scheme put in place by the CTP, and the arrangements regarding the allocation of revenues. In particular, when specifying the allocation of revenues, ESMA shall take into account the following aspects, in the following order of priority:

(i) a fixed reward per contributor, reflecting fixed costs linked to their contribution;

(ii) revenue sharing towards smaller exchanges contributing to the CT;

(iii) revenue sharing based on an allocation key based on the contribution to price formation that each contributor’s data represents, giving consideration to the value and number of trades and quotes, the transparency of the underlying trading mechanism, and the extent to which a contributor’s pre-trade and post-trade data is disseminated by the CTP.

ESMA shall submit those draft regulatory technical standards to the Commission by ... [six months after the date of entry into force of this amending Regulation].

Power is delegated to the Commission to supplement this Regulation by adopting the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.

2. CTPs shall adopt and publish on their website on a quartely basis service level standards covering all of the following:

(a) an inventory of market data contributors from whom market data are received;

(aa) an assessment of the quality of data received per contributor;

(ab) the number of data quality incidents and the measures adopted to address them;

(b) modes and speed of delivery of consolidated market data to users;

(c) measures taken to ensure operational continuity in the provision of consolidated market data.

3. CTPs shall have sound security mechanisms in place designed to guarantee the security of the means of transfer of market data▌data between the market▌ data contributors and the CTP and between the CTP and the users and to minimise the risk of data corruption and unauthorised access. CTPs shall maintain adequate resources and have back-up facilities in place to offer and maintain its services at all times.

3a. CTPsFor shalleach publishof athe listasset ofclasses EEAreferred Internationalto Securitiesin IdentificationArticle Number27da(1), (ISIN)the forCTP allshall publish a list of the financial instruments that are covered by eachthe CTP’sconsolidated mandatetape, inindicating accordancetheir withidentifying thisreference Regulation.data.

Each CTP shall offer free access to thisits list, and shall ensure that itthe list is regularly reviewed and updated, in order to offer a comprehensive view of all the financial instruments covered by the consolidated tapetape.

4. After 18 months of full operation of the CTP for shares, ESMA shall provide the Commission with an evidence-based motivated opinion on the effectiveness and fairness of the level of participation of market data contributors in the revenues generated by the CTP as set out in accordance with the second subparagraph of paragraph 1. The Commission may request ESMA to provide further opinions, where necessary or appropriate. The Commission shall be empowered to adopt a delegated act in accordance with Article 50 to revise the allocation key for the revenue redistribution, where appropriate.’;

1a. The CTP for financial instruments, other than shares and ETFs, may redistribute to data contributors part of the revenue generated by the consolidated tape.

(17) the following Article 27ha is inserted:

5. The CTP for shares and ETFs shall redistribute part of the revenues generated by the consolidated tape, as indicated in the reasoned decision referred to in Article 27db(3), to data contributors meeting one or more of the following criteria (‘revenue distribution scheme’):

(a) whether the data contributor is a small regulated market or an SME growth market whose annual trading volume of shares represents 1 % or less of the annual trading volume of shares in the Union (‘small trading venue’);

(b) whether the data contributor is a trading venue that has provided initial admission to trading of shares or ETFs on ... [five years before the date of entry into force of this amending Regulation] or thereafter; and

(c) whether the data is provided by a trading venue and pertains to transactions in shares and ETFs that have been concluded on a trading system that provides pre trade transparency and where those transactions did not result from orders that were subject to a waiver from pre trade transparency under Article 4 paragraph 1 point (c).

For the purposes of the revenue redistribution scheme, the CTP shall take into account the following trading volume (‘the relevant trading volume’):

(a) for the purposes of the first subparagraph, point (a), the total annual trading volume generated by that trading venue;

(b) for the purposes of the first subparagraph, point (b):

(i) in the case of small trading venues, their total annual trading volume;

(ii) in the case of trading venues other than small trading venues, the trading volume pertaining to the shares and ETFs referred to in that point;

(c) for the purposes of the first subparagraph, point (c), the volume pertaining to the shares and ETFs referred to in that point.

The CTP shall determine the amount of the revenue to be redistributed to each data contributor under the revenue distribution scheme by multiplying the relevant trading volume by the weight assigned to each criterion set out in the first subparagraph, as specified in the regulatory technical standards adopted pursuant to paragraph 6.

If trading venues meet more than one of the criteria above, the amounts resulting from the above calculation shall be added cumulatively.

6. ESMA shall develop draft regulatory technical standards to:

(a) specify the weights assigned to each criterion referred to in paragraph 5, first subparagraph;

(b) further specify the method for calculating amount of the revenue to be redistributed to each data contributor as referred to in paragraph 5, third subparagraph.

(c) Specify the criteria under which the CTP can, where the CTP proves that a data contributor has seriously and repeatedly breached the data requirements referred to in Article 22a, 22b and 22c, temporarily suspend the participation of that data contributor in the revenue redistribution scheme, the conditions under which the CTP is to resume revenue redistribution and, where there was no breach of those requirements, is to restitute the retained revenue with interest to that data contributor.

For the purposes of point (a) of this paragraph, the criterion set out in paragraph 5, first subparagraph, point (a), shall have a higher weight than the criterion set out in point (b) of that subparagraph, and the criterion set out in point (b) of that subparagraph shall have a higher weight than the condition set out in point (c) of that subparagraph.

ESMA shall submit those draft regulatory technical standards to the Commission by ... [nine months after the date of entry into force of this amending Regulation].

Power is delegated to the Commission to supplement this Regulation by adopting the regulatory technical standards referred to in paragraph 1, point (c), in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.’;

(33) the following article ▌is inserted:

‘Article 27ha Reporting obligations for consolidated tape providers

1. CTPs shall, atevery theyear, endpublish ofon eachtheir quarter,website publish▌performance onstatistics theirand website,incident whichreports shallrelating beto accessibledata forquality free,and data systems. Those performance statistics and incident reports relatingshall tobe dataaccessible qualityfree andof systems.charge.

2. 2. ESMA shall develop draft regulatory technical standards to specify the content, timing, format and terminology of the reporting obligation.obligation set out in paragraph 1.

ESMA shall submit those draft regulatory technical standards to the Commission by [OP[18 pleasemonths insertafter ninethe monthsdate afterof entry into force].force of this amending Regulation].

Power is delegated to the Commission to adoptsupplement this Regulation by adopting the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.’;

3. CTPs shall keep and preserve records relating to their business for a period of no lessat thanleast five years. Information concerning the first two yearsCTPs shall be kept inpromptly anmake easilythose accessiblerecords place,available andto the CTPrelevant shallcompetent promptlyauthority provideor ESMA with such records upon request.’;

(17a)(34) in Article 27i, the following paragraphs are inserted:

'4a.‘4a. An ARM shall have objective, non-discriminatory and publicly disclosed requirements for access to its services by undertakings that are subject to the reporting obligation set out in Article 26.

An ARM shall publicly disclose the prices and fees associated with the data reporting services provided under this Regulation. It shall disclose separately the prices and fees of each service provided, including discounts and rebates and the conditions to benefit from those reductions.them. It shall allow reporting entities to access specific services separately. The prices and fees charged by an ARM shall be cost-related.

4b. ARMs shall keep and preserve records relating to their business for at least five years. The information concerning the first two yearsARMs shall be kept in anpromptly easilymake accessiblethose placerecords andavailable ARMto shallthe providerelevant suchcompetent recordsauthority toor ESMA without delay upon request.’;

(18) in Article 28(1), paragraph 1, the introductory wording is replaced by the following:

(35) Article 28 is amended as follows:

(a) in paragraph 1, the introductory partwording is replaced by the following:

▌Transactions‘1. inFinancial OTCcounterparties ▌ and non-financial counterparties that are subject to the clearing obligation under Title II of Regulation (EU) No 648/2012 shall conclude transactions ▌ with other such financial counterparties or other such non-financial counterparties in derivatives pertaining to a class of derivatives that has been declared subject to the trading obligation in accordance with the procedure set out in Article 32 of this Regulation▌ and listed in the register referred to in Article 34 of this Regulation between counterparties as referred to in Article 4(1)(a) of Regulation (EU) No 648/2012 shall be concluded▌ only on:’;

(b) the followingin paragraph 2a2, the first subparagraph is inserted:deleted;

'2a. Derivative transactions that are exempt from or otherwise not subject to the clearing obligation under Article 4 of Regulation (EU) No 648/2012 shall not be subject to the trading obligation.';

(c) the following paragraph is inserted:

(19) in Article 32, the following paragraphs 7, 7a, 8 and 9 are added:

‘2a. Transactions in derivatives that are exempt from or not subject to the clearing obligation laid down in Article 4 of Regulation (EU) No 648/2012 shall not be subject to the trading obligation.’;

‘7. Where ESMA considers that the suspension of the clearing obligation as referred to in Article 6a of Regulation (EU) No 648/2012 is a material change in the criteria for the trading obligation to take effect, as referred to in paragraph 5 of this Article, ESMA may request the Commission to suspend the trading obligation laid down in Article 28(1) and (2) of this Regulation for the same classes of OTC derivatives that are subject to the request to suspend the clearing obligation.

(d) in paragraph 4, third subparagraph, point (b) is replaced by the following:

7a. Where ESMA considers that certain events or developments which could adversely affect the liquidity available in the Union in certain or all derivatives that have been declared subject to the trading obligation, ESMA may request that the Commission temporarily suspend the application of the trading obligation laid down in Article 28(1) and (2) for those financial instruments.

‘(b) trading venues have clear and transparent rules so that derivatives are capable of being traded in a fair, orderly and efficient manner, and are freely negotiable;’;

The temporary suspension referred to in the first subparagraph shall be valid for an initial period not exceeding three months from the date of publication of the implementing act referred to in paragraph 9. Such a suspensionmay be renewed for further periods not exceeding three months at a time if the grounds for the temporary suspension continue to be applicable.

(36) Article 31 is amended as follows:

8. The request referred to in paragraphs 7 and 7a shall not be made public.

(a) the title is replaced by the following:

9. After having received the request referred to in paragraph 7 and 7a, the Commission shall, without undue delay and, on the basis of the reasons and evidence provided by ESMA, do either of the following:

‘Post-trade risk reduction services’;

(a) in an implementing act suspend the trading obligation for the classes of OTC derivatives that are subject to the request to suspend the clearing obligation;

(b) paragraph 1 is replaced by the following:

‘1. The transparency obligations in Articles 8a, 10 and 21 of this Regulation, the trading obligation in Article 28 of this Regulation and the best execution obligation in Article 27 of Directive 2014/65/EU shall not apply to transactions in OTC derivatives that are formed and established as result of post-trade risk reduction services.’;

(c) paragraph 2 is deleted;

(d) paragraphs 3 and 4 are replaced by the following:

‘3. Investment firms and market operators that are providers of post-trade risk reduction services shall ensure the maintenance of complete and accurate records of the transactions referred to in paragraph 1 that are not already recorded or reported in accordance with Regulation (EU) No 648/2012. Those investment firms and market operators shall promptly make those records available to the relevant competent authority or ESMA upon request.

4. The Commission is empowered to adopt delegated acts in accordance with Article 50 to supplement this Regulation by specifying:

(a) what constitutes post-trade risk reduction services for the purposes of paragraph 1;

(b) the particulars of the transactions to be recorded pursuant to paragraph 3.’;

(37) Article 32 is amended as follows:

(a) in paragraph 2, point (a) is replaced by the following:

‘(a) the class of derivatives pursuant to paragraph 1, point (a), or a relevant subset thereof must be traded on at least one trading venue as referred to in Article 28(1); and’;

(b) in paragraph 4, the first subparagraph is replaced by the following:

‘ESMA shall, on its own initiative, in accordance with the criteria set out in paragraph 2 and after conducting a public consultation, identify and notify to the Commission the classes of derivatives or individual derivative contracts that should be subject to the obligation to trade on the venues referred to in Article 28(1) of this Regulation, but for which no CCP has yet received authorisation under Article 14 or 15 of Regulation (EU) No 648/2012.’;

(c) the following paragraphs are inserted:

‘4a. Where ESMA considers that the suspension of the clearing obligation as referred to in Article 6a of Regulation (EU) No 648/2012 is a material change in the criteria for the trading obligation to take effect, as referred to in paragraph 5 of this Article, ESMA may request that the Commission ▌ suspend the trading obligation laid down in Article 28(1) and (2) of this Regulation for the same classes of OTC derivatives that are subject to the request to suspend the clearing obligation.

7a. ESMA may request that the Commission suspend the trading obligation laid down in Article 28(1) and (2) for specific classes of OTC derivatives or for a specific type of counterparty, where such a suspension is necessary to avoid or address adverse effects to liquidity or serious threat to financial stability and to ensure the orderly functioning of financial markets in the Union and where that suspension is proportionate to those aims.

8. The requests referred to in paragraphs 7 and 7a shall not be made public.

9. After having received the requests referred to in paragraphs 7 and 7a, the Commission shall, without undue delay and, on the basis of the reasons and evidence provided by ESMA, do either of the following:

(a) by way of an implementing act, suspend the trading obligation for ▌classes of OTC derivatives or for types of counterparties;

(b) reject the requested suspension.

For the purposes of point (b), the Commission shall inform ESMA of the reasons why it rejected the requested suspension. The Commission shall immediately inform the European Parliament and the Council of that rejection and forward them the reasons provided to ESMA. The information provided to the European Parliament and the Council regarding the rejection and the reasons for that rejection shall not be made public.’;public.

(20) the following Article 32a is inserted:

The suspension referred to in the first subparagraph shall be valid for an initial period of no more than three months from the date of publication of the implementing act referred to in the first subparagraph, point (a).

Where the grounds for the suspension referred to in the first subparagraph continue to apply, the Commission may by way of an implementing act, extend that suspension for further periods of no more than three months, with the total period of the suspension of no more than 12 months.

The implementing acts referred to in the first and fourth subparagraphs of this paragraph shall be adopted in accordance with the examination procedure referred to in Article 51.’;

(38) the following article ▌ is inserted:

‘Article 32a Stand-alone suspension of the trading obligation

1. At the request of the competent authority of a Member State, the Commission maymay, adoptby way of an implementing act toact, suspend the derivatives trading obligation with respect to certain investment firms in accordance with the procedure referred to infinancial Articlecounterparties 51after, andwhere afterappropriate, having consulted ESMA. The competent authority shall indicate why it considers that the conditions for a suspension are met. In particular, the competent authority shall demonstrate that ana investmentfinancial firmcounterparty within its jurisdiction:

(a) regularly acts as a market maker in an OTC derivative subject to the derivatives trading obligation and regularly receives requests for a quote for the derivatives subject to the derivatives trading obligation from a non-EEA counterparty which has no active membership on an EEA trading venue that offers trading in the OTC derivative subject to the trading obligation; or

(b) from a non-EEA counterpart which has no▌ activeregularly membershipacts onas a EU trading venuemarket thatmaker offersin tradingan inOTC thecredit derivative subject to the derivatives trading obligation;obligation andand:

(c) regularly acts as a market maker in the derivative subject to the derivatives trading obligation.

(i) intends to trade OTC credit derivatives subject to the derivatives trading obligation on own account on a trading venue only open to counterparties that are CCP clearing members as defined in Article 2, point 14, of Regulation (EU) No 648/2012 (‘dealer-to-dealer’ venue);

1a. At the request of the competent authority of a Member State, the Commission may adopt an implementing act to suspend the derivatives trading obligation with respect to certain financial counterparties in accordance with the procedure referred to in Article 51 and after having consulted ESMA. The competent authority shall indicate why it considers that the conditions for a suspension are met. In particular, the competent authority shall demonstrate that the financial counterparty within its jurisdiction:

(ii) intends to trade OTC credit derivatives subject to the derivatives trading obligation on own account with a counterparty which is a market maker and which has no active membership on an EEA dealer-to-dealer venue that offers trading in the OTC derivatives subject to the trading obligation; and

(a) regularly trades derivatives subject to the derivatives trading obligation on a specific market segment;

(iii) clears those OTC credit derivatives in a CCP authorised in accordance with Regulation (EU) No 648/2012.

(b) regularly trades derivatives with a non-EEA market maker which has no active membership on an EU trading venue that offers trading in the derivative subject to the trading obligation;

(c) clears those derivatives in a CCP authorised in accordance with Regulation (EU) No 648/2012.

The implementing acts referred to in the first subparagraph shall be adopted in accordance with the examination procedure referred to in Article 51.

2. When assessing whether to suspend the trading obligation in accordance with paragraphs 1 andparagraph 1a,1, the Commission shall consider whether to suspend it for specific markets only, and shall take into account whether such suspension of the trading obligation would have a distortive effect on the clearing obligation laid down in Article 4(1) of Regulation (EU) No 648/2012.

The Commission shall also contact theother competent authorities offrom other Member States to assess whether investment firms in Member States other than that making the request in accordance with paragraph 1 are in a situation similar to those in the requesting Member State. The competent authorities of Member States that did not file a request pursuant to paragraph 1 and 1a may, after adoption of the implementing act mentioned in paragraph 1, request that investment firms that are in a situation similar to those in the requesting Member State are added to the implementing act. The competent authority of the Member State making that request shall indicate and demonstrate why it considers that the conditions for a suspension are also met.

2a. The implementing acts referred to in paragraphs 1 and 1a shall be adopted in accordance with the examination procedure referred to in Article 51.

Where the derivatives trading obligation with respect to the investment firm specified by the competent authority is suspended, the derivatives trading obligation shall not apply with respect to its counterparty, as referred to in paragraph 1, point (a) or (b).

3. The implementing act referred to in paragraphsparagraph 1 and 1a shall be accompanied by the evidence presented by the competent authority requesting the suspension.

4. The implementing act referred to in paragraphsparagraph 1 and 1a shall be communicated to ESMA and shall be published in the ESMA▌ register referred to in Article 34 of this Regulation.▌.

5. The Commission shall regularly review whether the grounds for the suspension of the derivatives trading obligation continue to apply.’;

(21)(39) Article 35 is amended as follows:

(a) in paragraph 1, first subparagraph, the introductory wording is replaced by the following:

‘1. Without‘▌Without prejudice to Article 7 of Regulation (EU) No 648/2012, a CCP shall accept to clear financial instruments on a non-discriminatory and transparent basis, including as regards collateral requirements and fees relating to access, regardless of the trading venue on which a transaction is executed.

The requirement in the first subparagraph shall not apply to exchange-traded derivatives.

(b) paragraph 3 is replaced by the following:

‘3. The CCP shall provide a written response to the trading venue either within three months of permitting access, on condition that a relevant competent authority has granted access pursuant to paragraph 4, or within three months of denying access. The CCP may deny a request for access only under the conditions specified in paragraph 6(a).6, point (a). Where a CCP denies access, it shall provide full reasons in its response and inform its competent authority in writing of the decision. Where the trading venue is established in a Member State other than the one of the CCP, the CCP shall also provide such notification and reasoning to the competent authority of that trading venue. The CCP shall provide access within three months of providing a positive response to the access request.’;

(ba)(c) paragraph 4 is replaced byamended theas following:follows:

‘4. The competent authority of the CCP or that of the trading venue shall grant a trading venue access to a CCP only where such access would not threaten the smooth and orderly functioning of the markets, in particular due to liquidity fragmentation, or would not adversely affect systemic risk.

(i) the first subparagraph is replaced by the following:

If a‘The competent authority refuses access,of itthe shallCCP issueor itsthat decisionof withinthe twotrading monthsvenue followingshall receiptgrant ofa thetrading requestvenue referredaccess to ina paragraphCCP 2only andwhere providesuch fullaccess reasonswould tonot threaten the othersmooth competentand authority,orderly functioning of the CCPmarkets, andin theparticular tradingdue venueto includingliquidity thefragmentation, evidenceor onwould whichnot theadversely decisionaffect issystemic based.’;risk.’;

(22) Article 36 is amended as follows:

(ii) the second and third subparagraphs are deleted;

(40) Article 36 is amended as follows:

(a) in paragraph 1, the first subparagraph is replaced by the following:

‘Without prejudice to Article 8 of Regulation (EU) No 648/2012, a trading venue shall, upon request, provide trade feeds on a non-discriminatory and transparent basis, including as regards fees related to access, to any CCP authorised or recognised byin accordance with that Regulation that wishes to clear transactions in financial instruments that are concluded on that trading venue. That requirement shalldoes not apply to:

(a) any derivative contract that is already subject to the access obligations under Article 8 of Regulation (EU) No 648/2012;

‘3. The trading venue shall provide a written response to the CCP within three months either permitting access, under the condition that the relevant competent authority has granted access pursuant to paragraph 4, or denying access. The trading venue may deny access only under the conditions specified pursuant to paragraph 6, point (a). When access is denied, the trading venue shall provide full reasons in its written response and forward that written response to its competent authority. Where the CCP is established in a different Member State than the trading venue, the trading venue shall also forward that written response to the competent authority of the CCP. The trading venue shall provide access within three months of providing a positive response to the access request.’;

(ba)(c) paragraph 4 is replaced byamended theas following:follows:

‘4. The competent authority of the trading venue or that of the CCP shall grant a CCP access to a trading venue only where such access would not threaten the smooth and orderly functioning of the markets, in particular due to liquidity fragmentation, and where the trading venue has put in place adequate mechanisms to prevent such fragmentation, or would not adversely affect systemic risk.

(i) the first subparagraph is replaced by the following:

If a‘The competent authority deniesof accessthe ittrading venue or that of the CCP shall issuegrant itsa decisionCCP withinaccess twoto monthsa followingtrading receiptvenue ofonly thewhere requestsuch referredaccess towould innot paragraphthreaten 2the smooth and provideorderly fullfunctioning reasonsof the markets, in particular due to theliquidity otherfragmentation, competentand authority,where the trading venue andhas theput CCPin includingplace theadequate evidencemechanisms onto whichprevent itssuch decisionfragmentation, isor based.’;would not adversely affect systemic risk.’;

(c) paragraph 5 is deleted;

(ii) the second and third subparagraphs are deleted;

(23) in Article 38, paragraph 1 is replaced by the following:

(d) paragraph 5 is deleted;

(c) in paragraph 6, point (d) is deleted.

(41) in Article 38, paragraph 1 is replaced by the following:

‘1. A trading venue established in a third country may request access to a CCP established in the Union only if the Commission has adopted a decision in accordance with Article 28(4) relating to that third country.

CCPs and trading venues established in third countries shall only be permitted to make use of the access rights referred to in Articles 35 and 36 with regard to financial instruments covered by those Articles and provided that the Commission has adopted a decision in accordance with paragraph 3 of this Article, determining that the legal and supervisory framework of the third country is considered to provide for an effective equivalent system for permitting CCPs and trading venues authorised under foreign regimes access to CCPs and trading venues established in that third country.’;

(24)(42) in Article 38g(1), the introductory wording is replaced by the following:

‘Where ESMA finds that a person listed in Article 38b(1), point (a), has not complied with any of the requirements laid down in Article 20, 21, 22, 22a, Article 22b▌22b or 26,22c, or in Title IVa, it shall take one or more of the following actions:’;

(25)(43) in Article 38h(1), the first subparagraph is replaced by the following:

‘Where ESMA, in accordance with Article 38k(5), finds that a person listed in Article 38b(1), point (a), has intentionally or negligently not complied with any of the requirements provided for in Article 22, 22a, Article 22b▌22b or 26,22c, or in Title IVa, it shall adopt a decision imposing a fine in accordance with paragraph 2 of this Article.’;

(26)(44) the following Article 39aarticle is▌is inserted:

‘Article 39a Ban on payment for forwarding client orders for execution

1. Investment firms acting on behalf of retail clients, as defined in Article 4, point (11), of Directive 2014/65/EU, or professional clients as referred to in Section II of Annex II of that Directive shall not receive any fee or commission or non-monetary benefits from any third party for executing orders from those clients on a particular execution venue or for forwarding client▌ orders of those clients to any third party for their execution.execution on a particular execution venue.

The first subparagraph shall not apply to fees, commissionsrebates or non-monetary benefits relateddiscounts toon the forwarding of professionaltransaction clients’fees ordersof forexecution execution,venues, where permitted under the approved and public tariff structure of a regulatedtrading marketvenue in the Union or MTF.’;of a third-country trading venue, where they exclusively benefit the client. Such discounts or rebates shall not result in a monetary benefit to the investment firm.

(27) Article 50 is amended as follows:

2. A Member State in which prior to ... [the date of entry into force of this amending Regulation] investment firms acting on behalf of clients are established which receive a fee or commission or non-monetary benefits from any third party for executing client orders on a particular execution venue or for forwarding client orders to any third party for their execution on a particular execution venue, may exempt investment firms under its jurisdiction from the prohibition laid down in paragraph 1 until 30 June 2026 when those investment firms provide investment services to clients domiciled or established in that Member State.

To apply the exemption referred to in the first subparagraph, a Member State which fulfils the condition set out in the first subparagraph shall notify ESMA by ... [six months after the date of entry into force of this amending Regulation] to that effect. ESMA shall maintain a list of Member States using this exemption. The list shall be made available to the public and updated regularly.’;

(45) Article 50 is amended as follows:

(a) paragraph 2 is replaced by the following:

‘2. The power to adopt delegated acts as referred▌referred to in the▌ followingArticle provisions1(9), shallArticle be2(2) conferredand for(3), anArticle indeterminate5(10), periodArticle from8a(4), 2Article July17(3), 2014:Article 27(4) and (5), Article 1(9),31(4), Article 2(2)38k(10), andArticle (3),38n(3), 5(9a),Article 13(2),40(8), 15(5),Article 17(3),41(8), Article 19(2)42(7), andArticle (3),45(10) and ArticlesArticle 26(1a),52(10), 27(4),(14b) ▌27g(7),and 27h(4),(15), 31(4),shall 38k(10),be 38n(3),conferred 40(8),for 41(8),an 42(7),indeterminate 45(10)period andfrom 52(10).’;2 July 2014.’;

(b) in paragraph 3, the first sentence▌paragraph is3▌is replaced by the following:

‘The delegation of power referred to in theArticle following1(9), provisionsArticle 2(2) and (3), Article 5(10), Article 8a(4), Article 17(3), Article 27(4) and (5), Article 31(4), Article 38k(10), Article 38n(3), Article 40(8), Article 41(8), Article 42(7), Article 45(10) and Article 52(10), (14b) and (15), may be revoked at any time by the European Parliament or by the Council:Council. ArticleA 1(9),decision Articleof 2(2)revocation andshall (3),put 5(9a),an Articlesend 13(2),to 15(5),the 17(3),delegation Articleof 19(2)the andpower (3),specified andin Articlesthat 26(1a),decision. 27(4),It ▌27g(7),shall 27h(4),take 31(4),effect 38k(10),the 38n(3),day 40(8),following 41(8),the 42(7),publication 45(10)of andthe 52(10).”;decision in the Official Journal of the European Union or at a later date specified therein. It shall not affect the validity of any delegated acts already in force.’;

(c) in paragraph 5, the first▌paragraph sentence5 is▌is replaced by the following:

‘A delegated act adopted pursuant to Article 1(9), Article 2(2) and (3), 5(9a), ArticlesArticle 13(2),5(10), 15(5),Article 17(3),8a(4), Article 19(2)17(3), andArticle (3),27(4) and Articles 26(1a), 27(4), ▌27g(7),(5), 27h(4),Article 31(4), Article 38k(10), Article 38n(3), Article 40(8), Article 41(8), Article 42(7), Article 45(10) or Article 52(10), (14b) and 52(10)(15), shall enter into force only if no objection has been expressed either by the European Parliament or by the Council within a period of three months of notification of that act to the European Parliament and to the Council or if, before the expiry of that period, the European Parliament and the Council have both informed the Commission that they will not object.”;object. That period shall be extended by three months at the initiative of the European Parliament or the Council.’;

(28)(46) Article 52 is amended as follows:

(a) paragraphs 11 and11, 12 are replacedand by13 theare following:deleted;

‘11. Three years after the first authorisation of a consolidated tape, the Commission shall, after having consulted ESMA, submit a report to the European Parliament and to the Council on the following:

(b) paragraph 14 is replaced by the following:

‘14. By 30 June 2026, ESMA, in close cooperation with the expert stakeholder group referred to in Article 22b, shall assess the market demand for the consolidated tape for shares and ETFs, the impact of that consolidated tape on the functioning of the market and on the attractiveness and international competitiveness of Union markets and firms, and whether the consolidated tape has delivered on its aim to decrease information asymmetries between market participants and to make the Union a more attractive location to invest. ESMA shall report to the Commission on the appropriateness of adding additional features to the consolidated tape, such as the dissemination of the market identifier code for pre-trade data. Based on that report, the Commission shall submit, where appropriate, a legislative proposal to the European Parliament and the Council.

14a. Three years after the first authorisation of a consolidated tape, the Commission shall, after having consulted ESMA and the expert stakeholder group referred to in Article 22b, submit a report to the European Parliament and to the Council on the following:

(a) the asset classes covered by a consolidated tape;

(b) the timeliness and deliverythe quality of marketthe data consolidation;provided to the CTP;

(c) the roletimeliness of marketthe datadissemination consolidationand inthe reducingquality implementationof shortfall;the core market data;

(d) the numberrole of subscribers to consolidatedcore market data per▌in assetreducing class;implementation shortfall;

(e) the effectnumber of market data consolidation on remedyingsubscribers informationto asymmetriescore betweenmarket variousdata capitalper marketasset participants;class;

(f) the appropriatenesseffect andof functioningcore ofmarket thedata participation▌on schemeremedying forinformation marketasymmetries databetween contributions;various capital market participants;

(g) the effectsappropriateness of the consolidatedtransmission marketprotocols dataused onfor investmentsthe inprovision SMEs.of data to the CTP;

(h) the possibility that the tape facilitates the identification of financial instruments which display features aligned with Regulation [PO please insert reference to the Regulation on European green bonds]

(h) the appropriateness and functioning of the revenue distribution scheme, in particular as regards data contributors that are small trading venues;

12. If by [OP insert date …▌ as of entry into force], no consolidated tapes have emerged through the selection procedures organised by ESMA as referred to in Article 27da, the Commission shall review the framework and shall accompany that review, where appropriate and after having consulted ESMA, with a legislative proposal▌’;

(i) the effects of the core market data on investments in SMEs.

(b) paragraphs 13, 14 and 15 are deleted;

14b. By ... [12 months after the date of entry into force of this amending Regulation] the Commission shall, in close cooperation with ESMA, assess the possibility of extending the requirements of Article 26 of this Regulation to AIFMs as defined in Article 4(1), point (b), of Directive 2011/61/EU, and management companies, as defined in Article 2(1), point (b), of Directive 2009/65/EC, which provide investment services and activities, as defined in Article 4(1), point (2), of Directive 2014/65/EU and which execute transactions in financial instruments. In particular, the Commission shall include a cost-benefit analysis and an evaluation of the scope of such extension.

(c) the following paragraph is added:

On the basis of that assessment and taking into account the goals of the capital markets union, the Commission is empowered to adopt delegated acts in accordance with Article 50 to amend this Regulation by extending the requirements of Article 26 as set out in the first subparagraph.

‘15a. By 30 June 2025, ESMA shall assess whether setting minimum holding periods of options, futures, swaps, forwards and any other derivative contracts and instruments relating at least to wholesale energy products, agricultural products, or emission allowances would effectively limit the volatility on these markets and ensure convergence between prices of derivatives in the delivery month and spot prices for the underlying commodity, without prejudice to price discovery on the market for the underlying commodity.

14c. By ... [four years after the date of entry into force of this amending Regulation], ESMA shall submit to the Commission a report assessing the appropriateness of the volume cap set out in Article 5(1) and the necessity to remove or to extend it to other trading systems or execution venues which derive their prices from a reference price, taking into account international best practices, the competitiveness of Union financial markets, and the effects of that volume cap on the fair and orderly trading of markets, and on the efficiency of price formation.’;

By 31 December 2025, on the basis of that report and taking into due account the goals of the capital markets union, the Commission shall, where appropriate, submit to the European Parliament and to the Council a legislative proposal to amend this Regulation by setting minimum holding periods as referred to in the first subparagraph.’

(c) paragraph 15 is amended as follows:

(29) in Article 54, paragraph 2 is deleted.

(i) the introductory wording is replaced by the following:

‘The Commission is empowered to adopt delegated acts in accordance with Article 50 in order to supplement this Regulation, by specifying measures in order to:’;

(ii) point (a) to (d) are deleted;

(iii) point (e) is replaced by the following:

‘(e) ensure that the core market data is provided on a reasonable commercial basis, on both a consolidated and unconsolidated basis, and meets the needs of the users of that information across the Union;’;

(iv) point (f) is deleted;

(v) point (g) and (h) are replaced by the following:

‘(g) specify arrangements applicable where the CTP no longer fulfils the selection criteria;

(h) specify arrangements under which a CTP may continue to operate a consolidated tape as long as no new entity is authorised through the selection procedure.’;

(47) Article 54 is amended as follows:

(a) paragraph 2 is deleted;

(b) the following paragraph is added:

The provisions of the delegated acts adopted pursuant to Regulation (EU) No 600/2014 as applicable before ... [the date of entry into force of this amending Regulation] shall continue to apply until the date of application of the delegated acts adopted pursuant to Regulation (EU) No 600/2014 as applicable from that date.

Article 2 Entry into force and application

This Regulation shall enter into force and apply on▌on the twentieth day following that of its publication in the Official Journal of the European Union.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels,...,

For the European Parliament For the Council

The President The President

PROCEDURE – COMMITTEE RESPONSIBLE

Title

Amending Regulation (EU) No 600/2014 as regards enhancing market data transparency, removing obstacles to the emergence of a consolidated tape, optimising the trading obligations and prohibiting receiving payments for forwarding client orders

References

COM(2021)0727 – C9-0440/2021 – 2021/0385(COD)

Date submitted to Parliament

25.11.2021

Committee responsible

Date announced in plenary

ECON

27.1.2022

Committees asked for opinions

Date announced in plenary

ITRE

27.1.2022

JURI

27.1.2022

Not delivering opinions

Date of decision

ITRE

9.12.2021

JURI

10.2.2022

Rapporteurs

Date appointed

Danuta Maria Hübner

2.12.2021

Discussed in committee

10.10.2022

17.11.2022

Date adopted

1.3.2023

Result of final vote

+:

–:

0:

45

5

9

Members present for the final vote

Rasmus Andresen, Anna-Michelle Asimakopoulou, Manon Aubry, Gunnar Beck, Isabel Benjumea Benjumea, Stefan Berger, Gilles Boyer, Markus Ferber, Jonás Fernández, Giuseppe Ferrandino, Frances Fitzgerald, José Manuel García-Margallo y Marfil, Valentino Grant, Claude Gruffat, José Gusmão, Enikő Győri, Eero Heinäluoma, Michiel Hoogeveen, Danuta Maria Hübner, France Jamet, Billy Kelleher, Ondřej Kovařík, Georgios Kyrtsos, Aurore Lalucq, Aušra Maldeikienė, Siegfried Mureşan, Denis Nesci, Luděk Niedermayer, Piernicola Pedicini, Lídia Pereira, Kira Marie Peter-Hansen, Eva Maria Poptcheva, Evelyn Regner, Dorien Rookmaker, Alfred Sant, Joachim Schuster, Ralf Seekatz, Pedro Silva Pereira, Paul Tang, Irene Tinagli, Ernest Urtasun, Johan Van Overtveldt, Stéphanie Yon-Courtin

Substitutes present for the final vote

Marc Angel, Nicola Beer, Karima Delli, Herbert Dorfmann, Gianna Gancia, Eider Gardiazabal Rubial, Elisabetta Gualmini, Valérie Hayer, Chris MacManus, Fulvio Martusciello, Jessica Polfjärd, Clara Ponsatí Obiols, René Repasi

Substitutes under Rule 209(7) present for the final vote

Joachim Kuhs, Alessandro Panza, Roberts Zīle

Date tabled

2.3.2023

FINAL VOTE BY ROLL CALL IN COMMITTEE RESPONSIBLE

Key to symbols: