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From · report parliamentary committee draft · 2022-07-26 ECON-PR-731644 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

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To · Plenary report · 2023-03-02 A-9-2023-0040 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

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~~PR_COD_1amCom~~

PR_COD_1consamCom

Symbols for procedures

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

(Ordinary legislative procedure: first reading)

– having regard to the Commission proposal to Parliament and the Council ~~(COM(2021)727),~~(COM(2021)0727),

– 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),~~(C9-0440/2021),

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

– 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 ~~(A90000/2022),~~(A9-0040/2023),

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

Amendment 1

~~Proposal for a regulation~~

AMENDMENTS BY THE EUROPEAN PARLIAMENT*

~~Title 1~~

to the Commission proposal

~~Text proposed by the Commission~~

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

~~Amendment~~

~~Proposal for a~~

~~REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL~~

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

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 regulating the forwarding and execution of client orders

(Text with EEA relevance)

~~(Text with EEA relevance)~~

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

~~Or. en~~

Having regard to the Treaty on the Functioning of the European Union, and in particular Article 114 thereof,

~~Amendment 2~~

Having regard to the proposal from the European Commission,

~~Proposal for a regulation~~

After transmission of the draft legislative act to the national parliaments,

~~Recital 6~~

Having regard to the opinion of the European Central Bank,

~~Text proposed by the Commission~~

Having regard to the opinion of the European Economic and Social Committee,

~~Amendment~~

Acting in accordance with the ordinary legislative procedure,

(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. As there is no justification for excluding the smallest orders from a transparent order book and in order to increase pre-trade transparency and thereby reinforce the price formation process, that waiver should be applicable to orders with a size greater than or equal to twice the standard market size. 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.

Whereas:

(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, which should not exceed twice the standard market size. When defining the possible threshold, ESMA should take into account the impact of that measure on i) market quality, ii)overall liquidity on Union trading venues, iii) end investors’ outcomes and iv) 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.

(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.

~~Or. en~~

(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 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.

~~Amendment 3~~

(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. 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.

~~Proposal for a regulation~~

(4) To date, however, no supervised entity has applied for authorisation to act as a CTP. 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’) 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 SIs should submit to the CTP. It thirdly requires that market data contributors transmit to 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.

~~Recital 7~~

(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 an RM, 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.

~~Text proposed by the Commission~~

(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.

~~Amendment~~

(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), point (i) of that Regulation. The use of both waivers is capped by the double volume cap (‘DVC’). The DVC 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 may not exceed 4% of total trading in that instrument in the Union. When this threshold is breached, dark trading in that instrument on that venue is suspended. Secondly the amount of dark trading in an equity instrument in the Union may not exceed 8% of total trading in that instrument in the Union. When this threshold is breached all dark trading 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. 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 a new single volume cap relying solely on the EU-wide threshold. That threshold should be lowered to 7 % to compensate for a potential increase of trading under those waivers as a consequence of abolishing the venue specific threshold. Utilising all the available and relevant market data, ESMA should regularly assess the calibration of the threshold of the single volume cap, its scope, its effects on the competitiveness of Union firms and 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 the limitations that are currently in place to limit dark trading, including further intervention on any trading system, as opposed to only a subset thereof, to ensure that these are effective in their aim to safeguard the price formation process without unduly affecting the global competitiveness of Union firms and the attractiveness of the Union’s markets. Taking into account financial stability considerations, international best practices and developments, ESMA should formulate its suggestions in a report to the Commission by ... [three years after the entry into force of this amending Regulation], and every two years thereafter.

(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), point (i) of that Regulation. The use of both waivers is capped by the double volume cap (‘DVC’). The DVC 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 may not exceed 4% of total trading in that instrument in the Union. When this threshold is breached, dark trading in that instrument on that venue is suspended. Secondly the amount of dark trading in an equity instrument in the Union may not exceed 8% of total trading in that instrument in the Union. When this threshold is breached all dark trading 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. This causes complexity in terms of monitoring the levels of dark trading and of enforcing the suspension. In order to reduce complexity and align the Union with international practices, the cap mechanism should be suspended for at least five years. ESMA, which would be empowered to monitor market conditions and, in particular, the price formation process and the liquidity available on lit venues, should review the suspension annually. If the suspension of the cap alters the balance between market participants and harms the price formation process, ESMA should propose that the Commission halt the suspension, and revert to a cap mechanism relying solely on a Union-wide threshold. If that were to be the case, to simplify the double volume cap while keeping its effectiveness, the proposal introduces a new single volume cap relying solely on the EU-wide threshold. That threshold should be lowered to 7 % to compensate for a potential increase of trading under those waivers as a consequence of abolishing the venue specific threshold. At the end of the five-year suspension period, ESMA should publish a final report detailing the impact of the suspension on Union markets, and on the basis of that report the Commission should consider whether to renew the suspension or delete the provisions related to the cap mechanism.

~~Or. en~~

~~Amendment 4~~

~~Proposal for a regulation~~

~~Recital 8~~

~~Text proposed by the Commission~~

~~Amendment~~

(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 competent authorities.

~~Or. en~~

(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.

~~Amendment 5~~

(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.

~~Proposal for a regulation~~

(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 ESMA. When determining the minimum size, 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.

~~Recital 9~~

(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.

~~Text proposed by the Commission~~

(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.

~~Amendment~~

(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.

(9) To ensure an adequate level of transparency, the price of a non-equity transaction should be published as close to real time as possible and 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 volumes of transactions for a short period of time, which should not be longer than two 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, the size of the transaction and, for bonds, the credit rating and it should no longer include the size specific to the instrument concerned.

(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.

(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), the size of the transaction (trade size) and should no longer include the size specific to the instrument concerned nor the large in scale size. 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.

(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.

~~Or. en~~

(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.▌

~~Amendment 6~~

(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.

~~Proposal for a regulation~~

~~Recital 11~~

~~Text proposed by the Commission~~

~~Amendment~~

(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 ESMA. The minimum size should not exceed twice the standard market size, and should be determined by considering the following objectives: i) increasing pre-trade transparency of equity instruments for the benefit of end-investors; ii) maintaining a level playing field between trading venues and systematic internalisers; iii) providing end investors with an adequate choice of trading options; and iv) ensuring that the trading landscape in the Union remains attractive and competitive both domestically and internationally.

~~Or. en~~

~~Amendment 7~~

~~Proposal for a regulation~~

~~Recital 12~~

~~Text proposed by the Commission~~

~~Amendment~~

(12) In order to create a level playing field, in addition to the obligation to publish firm quotes relating to a minimum of twice the standard market size, systematic internalisers should also no longer be allowed to match at midpoint below twice the standard market size. It should furthermore be clarified that systematic internalisers should be allowed to match at midpoint in so far as they comply with the tick-size rules in accordance with Article 49 of Directive 2014/65/EU when they trade above twice the standard market size but below the large in-scale threshold. When systematic internalisers trade above a large in-scale threshold, they should continue to be allowed to match at midpoint without complying with the tick-size regime.

(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.

~~Or. en~~

~~Amendment 8~~

~~Proposal for a regulation~~

~~Recital 15~~

~~Text proposed by the Commission~~

~~Amendment~~

(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 (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 specified by the Commission in a Delegated Act and should take into account the advice of a dedicated consultative group, composed of experts from the industry and from public authorities.

(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 (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 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, composed of experts from the industry and from public authorities tasked with providing indications limited to the output of the consolidated tape. ESMA will be closely involved in the work of that consultative group.

~~Or. en~~

~~Amendment 9~~

~~Proposal for a regulation~~

~~Recital 17~~

~~Text proposed by the Commission~~

~~Amendment~~

~~Or. en~~

~~Amendment 10~~

~~Proposal for a regulation~~

~~Recital 19~~

~~Text proposed by the Commission~~

~~Amendment~~

(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.

~~Or. en~~

(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.

~~Amendment 11~~

(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.

~~Proposal for a regulation~~

(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.

~~Recital 19 a (new)~~

(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.

~~Text proposed by the Commission~~

(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.

~~Amendment~~

(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) 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 SIs will act as liquidity providers, providing further clarity to the overall structure of the equity market.

(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.

~~Or. en~~

(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.

~~Amendment 12~~

(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.

~~Proposal for a regulation~~

(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.

~~Recital 20~~

(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.

~~Text proposed by the Commission~~

(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.

~~Amendment~~

(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.

(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. Taking into account the novelty of the proposed scheme, ESMA should only mandate the provision of post-trade transparency data for the first selection procedure that it runs in relation to shares. At least 18 months before the launch of the second selection procedure, ESMA should submit a report to the Commission assessing whether there is market demand for extending the data contributed to the tape to pre-trade data. On the basis of such a report, the Commission should be empowered, by way of a delegated act, to further specify the depth of pre-trade data to the tape.

(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.

(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 after 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 shares only, the CTP should comprise pre-trade data related to the best bid and offer. ESMA should also require the CTP for shares to be capable or at least to have the technical capabilities to consolidate and display pre-trade data related to the first five layers of order books.

(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.

~~Or. en~~

(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.

~~Amendment 13~~

~~Proposal for a regulation~~

~~Recital 21~~

~~Text proposed by the Commission~~

~~Amendment~~

(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 only 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.

~~Or. en~~

~~Amendment 14~~

~~Proposal for a regulation~~

~~Recital 22~~

~~Text proposed by the Commission~~

~~Amendment~~

(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 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. Finally, smaller regulated 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 CT should be able to opt in into the mandatory contribution scheme by notifying ESMA of their intent.

~~Or. en~~

~~Amendment 15~~

~~Proposal for a regulation~~

~~Recital 23~~

~~Text proposed by the Commission~~

~~Amendment~~

(23) Small regulated markets are regulated markets 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 that lower trading volumes (or nominal values) penalise smaller exchanges in the revenue participation scheme designed for the consolidated tape for shares, data from trades in these 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.

(23) The desired outcome would be to provide end investors with a truly consolidated overview of the trading opportunities available in the Union and to increase the overall domestic and international attractiveness of the Union capital markets, in line with the objectives of the Capital Markets Union, and to include small regulated markets in the picture created by the consolidated tape. 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 equities 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 traded in smaller regulated markets 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.

~~Or. en~~

~~Amendment 16~~

~~Proposal for a regulation~~

~~Recital 24~~

~~Text proposed by the Commission~~

~~Amendment~~

(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 for regulated markets in the context of the consolidated tape for shares. This report should be prepared on the basis of at least 12 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 safeguarding the role that these markets play in their local financial ecosystem. The Commission should be empowered to revise the mechanism of allocation by way of a delegated act, where necessary or appropriate.

(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 equities. 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. The assessment should also establish whether the inclusion of those smaller regulated markets in the consolidated tape resulted in i) an increase in the trading volumes of shares in those regulated markets, ii) a positive effect on professional and retail investors participation in the market, and iii) 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.

~~nOr. en~~

~~Amendment 17~~

~~Proposal for a regulation~~

~~Recital 32~~

~~Text proposed by the Commission~~

~~Amendment~~

(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 receives a payment from a trading counterpart in exchange for ensuring the execution of client trades. Investment firms should be therefore be prohibited from receiving such payment. That prohibition should apply to instruments traded on venues, specifically to shares, ETFs and derivatives, and should concern any type of intermediary, whether it is a trading venue, a systematic internaliser or an OTC firm.

~~Or. en~~

~~Amendment 18~~

~~Proposal for a regulation~~

~~Recital 34~~

~~Text proposed by the Commission~~

~~Amendment~~

(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, 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,

(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,

~~Or. en~~

HAVE ADOPTED THIS REGULATION:

~~Amendment 19~~

Article 1 Amendments to Regulation (EU) No 600/2014

~~Proposal for a regulation~~

(1) Article 1 is amended as follows:

~~Article 1 – paragraph 2 – point a a (new)~~

(a) in paragraph 1, the following point (i) is added:

~~Regulation (EU) No 600/2014~~

(h) the scope of multilateral trading.’;

~~Article 2 – paragraph 1 – point 16 a (new)~~

(b) paragraph 3 is replaced by the following:

~~Text proposed by the Commission~~

‘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.’;

~~Amendment~~

~~(aa) the following point is inserted:~~

‘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.

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

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.

~~Or. en~~

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.’;

~~Justification~~

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

Inclusion of new ‘designated reporting entities’ (DREs) status in definitions of MiFIR. Feedback from market participants and ESMA showed that the existing SIs reporting regime creates uncertainty, leads to duplicative reporting, and leads to higher costs, particularly for smaller investment firms. The changes to SI regime (including the introduction of a register of DREs by ESMA) seek to decouple SIs regime and reporting obligations, providing clarity, more flexibility, and leading to a clearer, more reliable picture of market participants.

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

~~Amendment 20~~

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

~~Proposal for a regulation~~

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

~~Article 1 – paragraph 2 – point a b (new)~~

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

~~Regulation (EU) No 600/2014~~

(ab) point (17) is amended as follows:

~~Article 2 – paragraph 1 – point 17~~

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

~~Present text~~

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

~~Amendment~~

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

~~(ab) point (17) is replaced by the following:~~

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

~~(17) ‘liquid market’ means:~~

(i) the market capitalisation;

~~‘(17) ‘liquid market’ means:~~

(ii) the average daily number of transactions in those financial instruments, in particular, the fact that a financial instrument is traded daily;

(a) for the purposes of Articles 9, 11, and 18, a market for a financial instrument or a class of financial instruments, 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 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 number and type of market participants, including the ratio of market participants to traded financial instruments in a particular product;~~

~~(iii) the average size of spreads, where available;~~

~~(iiia) the issuance size used to define a liquid market for bonds and may be used to define a liquid market for other non-equity instruments;~~

~~(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:~~

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

~~(i) the free float;~~

~~(i) traded daily;~~

~~(ia) market capitalisation;~~

~~(ii) the average daily number of transactions in those financial instruments;~~

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

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

~~Or. en~~

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

~~(https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A02014R0600-20220101)~~

‘(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;’;

~~Justification~~

Amendment to clarify thati) the issuance size can be used to determine the liquidity of an instrument, where relevant - in line with the proposed provisions under Article 11;ii) as ‘an instrument being traded daily’ is a precondition for liquidity and treated as a fourth criterion, it is added to the list of criteria under point (17).iii) ‘free float’ is replace by ‘market capitalisation’ as:- market participants reportedly struggle to provide free-float information;- free-float does not seem to be the most relevant parameter to assess the liquidity of an instruments;- free-float is not a concept that exists in the ETFs and certificates markets;The number of outstanding shares to be used for the calculation of the market cap to be used for this assessment is also an important information in the context of the Short Selling Regulation.

‘(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;’;

~~Amendment 21~~

~~Proposal for a regulation~~

~~Article 1 – paragraph 2 – point b~~

~~Regulation (EU) No 600/2014~~

~~Article 2 – paragraph 1 – point 34 a (new)~~

~~Text proposed by the Commission~~

~~Amendment~~

~~‘(34a) ‘market data contributor’ means a trading venue, an investment firm, including systematic internalisers, or an APA;’~~

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

~~Or. en~~

~~Justification~~

The role of investment firms (SIs) contributing to the CTP should be limited to pre-trade data.APAs will submit post-trade data for investment firms to the CTP. Allowing investment firms also to submit such data might result in double-reporting and inconsistencies.

~~Amendment 22~~

~~Proposal for a regulation~~

~~Article 1 – paragraph 2 – point c a (new)~~

~~Regulation (EU) No 600/2014~~

~~Article 2 – paragraph 1 – point 36a~~

~~Present text~~

~~Amendment~~

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

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

‘(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);’;

~~Or. en~~

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

~~(https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A02014R0600-20220101)~~

(36b) ‘core market data’ means:

~~Justification~~

(a) all of the following data on equities:

Without amending this point, the drafting would include “market data contributors” (34a) in the DRSP definition.This would cause confusion as to whether the provision referring to DRSPs also applies to market data contributors (in particular trading venues and SIs), whereas they are only meant for ARMs, APAs and CTPs.

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

~~Amendment 23~~

(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;

~~Proposal for a regulation~~

(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;

~~Article 1 – paragraph 2 – point d~~

(iii) the intra-day auction information;

~~Regulation (EU) No 600/2014~~

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

~~Article 2 – paragraph 1 – point 36b – point a – introductory part~~

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

~~Text proposed by the Commission~~

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

~~Amendment~~

(vii) the timestamp information on all of the following:

~~all of the following data on equities:~~

- 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;

~~all of the following data on shares and ETFs:~~

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

~~Or. en~~

- any change to the trading status of an instrument or segment;

~~Justification~~

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

~~Clarifying scope of consolidated tape by enhancing the legal clarity with regards to the fact that with equities what is intended is shares and ETFs.~~

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

~~Amendment 24~~

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

~~Proposal for a regulation~~

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

~~Article 1 – paragraph 2 – point d~~

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

~~Regulation (EU) No 600/2014~~

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

~~Article 2 - paragraph 1 - point 36b – point a - point i~~

~~Text proposed by the Commission~~

~~Amendment~~

~~(i) the best bids and offers with corresponding volumes;~~

(i) the best bids and offers with corresponding volumes and timestamps, limited to pre-trade transparency data for shares. For auction systems, that also means the price at which the auction trading system would best satisfy its trading algorithm and the volume that participants in that system would potentially execute at that price;

~~Or. en~~

~~Justification~~

Core market” data should be limited only to the instruments that are in scope of the CTP in the proposal. As the pre-trade CTP would be only for shares and not for all equities, the amendment clarifies that pre-trade data only relates to share. Please note that this does not exclude the possibility of a single CTP provider for shares and ETFs, as the appointed CTP could simply consolidate the different data streams separately.

~~Amendment 25~~

~~Proposal for a regulation~~

~~Article 1 – paragraph 2 – point d~~

~~Regulation (EU) No 600/2014~~

~~Article 2 – paragraph 1 – point 36b – point b – introductory part~~

~~Text proposed by the Commission~~

~~Amendment~~

~~all of the following data on non-equities:~~

~~all of the following data on bonds and derivatives:~~

~~Or. en~~

~~Justification~~

~~In line with previous amendments and comments.~~

~~Amendment 26~~

~~Proposal for a regulation~~

~~Article 1 – paragraph 2 – point d~~

~~Regulation (EU) No 600/2014~~

~~Article 2 – paragraph 1 – point 36b – point b – point iii~~

~~Text proposed by the Commission~~

~~Amendment~~

(iii) standardised instrument identifier that applies across venues;

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

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

~~Or. en~~

- the time of execution of the trade;

~~Amendment 27~~

- the time of publication of the trade;

~~Proposal for a regulation~~

- the receipt of market data from the market data contributors;

~~Article 1 – paragraph 2 – point d~~

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

~~Regulation (EU) No 600/2014~~

- the dissemination of consolidated market data to subscribers;

~~Article 2 – paragraph 1 – point 36b – point b – point iv – indent 4~~

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

~~Text proposed by the Commission~~

(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;

~~Amendment~~

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

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

(3) Article 4 is amended as follows:

~~— the receipt of market data by the consolidated tape provider;~~

▌

~~Or. en~~

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

~~Justification~~

‘The reference price referred to in paragraph 1, point (a) shall be established by obtaining either of the following:

~~Aligning language with Article 2(1)(36b)(a).~~

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

~~Amendment 28~~

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

~~Proposal for a regulation~~

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

~~Article 1 – paragraph 3 – point a~~

~~Regulation (EU) No 600/2014~~

~~Article 4 – paragraph 1~~

~~Text proposed by the Commission~~

~~Amendment~~

~~(a) paragraph 1 is amended as follows:~~

~~deleted~~

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

‘(a) systems matching orders that are larger than twice the standard market size and that are based on a trading methodology by which the price of the financial instruments referred to in Article 3(1) is derived from either of the following:

~~(i) the price of those financial instruments at the trading venues where those financial instruments were first admitted to trading;~~

(ii) the price of those financial instruments at the most relevant market in terms of liquidity where that price is widely published and is regarded by market participants as a reliable reference price;

~~(iii) the consolidated tape for shares or ETFs.’;~~

~~(ii) the following subparagraph is added:~~

~~‘For the purposes of point (a), the continued use of that waiver shall be subject to the conditions set out in Article 5.’;~~

~~Or. en~~

~~Justification~~

~~See justification related to introduction of Article 4(6)(f). Text proposed by the COM for paragraph 1 is deleted as ESMA will be mandated to identify the threshold for the use of the RPW.~~

~~Amendment 29~~

~~Proposal for a regulation~~

~~Article 1 – paragraph 3 – point b~~

~~Regulation (EU) No 600/2014~~

~~Article 4 – paragraph 2 – subparagraph 1 – point a – point iii~~

~~Text proposed by the Commission~~

~~Amendment~~

~~(iii) the consolidated tape for shares or ETFs;~~

(iii) the consolidated tape for shares and ETFs;

~~Or. en~~

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

~~Justification~~

(ba) paragraph 6 is amended as follows:

~~Reflecting the possibility of a single CTP for shares and equities.~~

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

~~Amendment 30~~

~~Proposal for a regulation~~

~~Article 1 – paragraph 3 – point b a (new)~~

~~Regulation (EU) No 600/2014~~

~~Article 4 – paragraph 6 – point a~~

~~Present text~~

~~Amendment~~

~~(ba) in paragraph 6, 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);

‘(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;’;

~~Or. en~~

(ii) the following point is added:

~~(https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A02014R0600-20220101)~~

‘(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.’;

~~Justification~~

(4) Article 5 is amended as follows:

Amendment provides ESMA with a clear mandate to determine the information to be made public for the different equity and equity-like financial instruments, especially in consideration of the proposal of a pre-trade CTP for shares. Different market practices have been observed in this respect, which make it challenging for market participants to compare pre-trade data.

(a) the title is replaced by the following:

~~Amendment 31~~

‘Article 5 Volume cap’;

~~Proposal for a regulation~~

(b) paragraph 1 is replaced by the following:

~~Article 1 – paragraph 3 – point b b (new)~~

‘1. Trading venues shall suspend their use of the waivers referred to in Article 4(1), point (a), and 4(1), point (b)(i) where the percentage of volume traded in the Union in a financial instrument carried out under those waivers exceeds 7% of the total volume traded in that financial instrument in the Union. Trading venues shall base their decision to suspend the use of those waivers 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 six months.’;

~~Regulation (EU) No 600/2014~~

~~Article 4 – paragraph 6 – point e a (new)~~

(d) paragraph 4 is replaced by the following:

~~Text proposed by the Commission~~

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

~~Amendment~~

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

~~(bb) in paragraph 6, the following point is added:~~

(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;

‘(ea) the minimum size of an order that may be matched using the trading methodology referred to in paragraph 1(a), which shall be determined taking into account international practices and the competitiveness of Union firms, and shall not be higher than twice the standard market size.’;

~~Or. en~~

(e) paragraphs 5 and 6 are deleted;

~~Justification~~

(f) paragraph 7 is replaced by the following:

Empowering ESMA to define the threshold for the use of the RPW. This would provide more flexibility than the COM's proposed rigid threshold at 2x SMS, while achieving the core objectives of the provision, i.e. to increase pre-trade transparency and reinforce the price formation process. ESMA should take into account, and possibly experiment, the potential impact of this measure on elements such as i) market quality, ii) overall liquidity on EU venues, iii) end investors’ outcomes and iv) domestic and international attractiveness and competitiveness of EU capital markets and firms.

‘7. To ensure a reliable basis for monitoring the trading taking place under the waivers referred to in Article 4(1), point (a), and Article 4(1), point (b)(i) 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 those waivers’;

~~Amendment 32~~

(fa) the following paragraph is added:

~~Proposal for a 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.

~~Article 1 – paragraph 4 – point d~~

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.’;

~~Regulation (EU) No 600/2014~~

(4a) Article 8 is amended as follows:

~~Article 5 – paragraph 4 – introductory part~~

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

~~Text proposed by the Commission~~

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.’;

~~Amendment~~

(b) paragraph 4 is deleted;

~~ESMA shall publish within five working days of the end of each calendar month all of the following data:~~

(5) Article 9 is amended as follows:

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

~~Or. en~~

~~Justification~~

Amendment grants ESMA more time for the publication under this article, as this would provide the necessary time for the supervisor to check records and prepare the publication and avoid possible frequent late publications or publication that need amendments.

~~Amendment 33~~

~~Proposal for a regulation~~

~~Article 1 – paragraph 4 – point e a (new)~~

~~Regulation (EU) No 600/2014~~

~~Article 5 – paragraph 6~~

~~Text proposed by the Commission~~

~~Amendment~~

~~(ea) paragraph 6 is deleted;~~

~~Or. en~~

~~Justification~~

Removing the publication of the mid-month reports by ESMA. The supervisor provided supporting evidence that being close to the 3.75% and 7.75% thresholds does not discourage trading in dark in the following period. Therefore, considering that (i) the mid-month publication does not require the suspension of dark trading (ii) they seem not to fulfil their goal to alert and deter possible future breaches and (iii) this additional publication per month means additional resources are being used for insignificant benefits, paragraph 6 is deleted.

~~Amendment 34~~

~~Proposal for a regulation~~

~~Article 1 – paragraph 4 – point f a (new)~~

~~Regulation (EU) No 600/2014~~

~~Article 5 – paragraph 9 a (new)~~

~~Text proposed by the Commission~~

~~Amendment~~

~~(fa) the following paragraph is inserted:~~

‘9a. The restrictions of trading under the waivers provided for in Article 4(1)(a) and Article 4(1)(b)(i) in accordance with Article 5, paragraphs (1) to (6), shall be suspended until ... [five years after the date of entry into force of this amending Regulation].

~~ESMA shall be empowered to supervise changes to market practices as a result of this suspension, and establish whether the measure unduly harms price formation. To this end, ESMA shall~~

~~(a) issue a annual report identifying the percentage of trading in a financial instrument on a trading venue under those waivers;~~

(b) on the basis of that report, issue an opinion to the Commission assessing the compatibility of the suspension of the trade restrictions under those waivers with price formation and market equilibrium.

Should ESMA indicate that the effect of the suspension is detrimental to both elements, power is delegated to the Commission to reinstate the trade restrictions under the waivers provided for in Article 4(1)(a) and Article 4(1)(b)(i) in accordance with Article 5, paragraphs (1) to (6).’;

~~Or. en~~

~~Justification~~

Current limits on the amount of trading that can take place without pre-trade transparency are arbitrary, the evidence on their effectiveness in either reinforcing the price formation and redirecting trading flows to lit venues is lacking. Given their ineffectiveness, they place an unnecessary burden on ESMA and market participants, and risk hindering the international competitiveness of EU firms and diminish investors' return. Other measures are better placed to strengthen lit venues (e.g. increased thresholds for the use of the RPW, higher SIs quoting obligation, ban of PFOF). The cap mechanism should thus be suspended, while ESMA continues to monitor the level of dark trading and be empowered to limit it – by restricting the use of the reference price and negotiated trade waivers – if there is evidence that the volume of such trading is undermining the efficiency of the price formation process.

~~Amendment 35~~

~~Proposal for a regulation~~

~~Article 1 – paragraph 4 a (new)~~

~~Regulation (EU) No 600/2014~~

~~Article 8~~

~~Present text~~

~~Amendment~~

~~(4a) Article 8 is replaced by the following:~~

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, and structured finance products, emission allowances, derivatives traded on a trading venue and package orders. That requirement shall also apply to actionable indication of interests. Market operators and investment firms operating a trading venue 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.

‘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 derivatives 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 different types of trading systems, including order-book, quote-driven, hybrid, periodic auction trading and voice trading systems.

~~2. The transparency requirements referred to in paragraph 1 shall be calibrated for central limit order book and periodic auction systems only.~~

3. 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 referred to in paragraph 1 to investment firms which are obliged to publish their quotes in bonds, structured finance products, emission allowances and derivatives pursuant to Article 18.

4. Market operators and investment firms operating a trading venue shall, where a waiver is granted in accordance with Article 9(1)(b), make public at least indicative pre-trade bid and offer prices which are close to the price of the trading interests advertised through their systems in bonds, structured finance products, emission allowances and derivatives traded on a trading venue. Market operators and investment firms operating a trading venue shall make that information available to the public through appropriate electronic means on a continuous basis during normal trading hours. Those arrangements shall ensure that information is provided on reasonable commercial terms and on a non-discriminatory basis.

~~Or. en~~

~~(https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A02014R0600-20220101)~~

~~Justification~~

Market participants across the buy- and sell-side have consistently reported that the pre-trade transparency regime for RFQ and voice systems is of negligible added value to end users in fixed income markets. This has also been informally recognised by supervisors. The removal of these requirements, together with the introduction of the CT, will remove an undue burden on market participants without affecting the levels of transparency in the market. Same principle apply for changes to Article 18. Amedments also deletes paragraph 4, in line with COM deletion of SSTI.

~~Amendment 36~~

~~Proposal for a regulation~~

~~Article 1 – paragraph 5 – point a~~

~~Regulation (EU) No 600/2014~~

~~Article 9 – paragraph 1~~

~~Text proposed by the Commission~~

~~Amendment~~

~~(a) in paragraph 1, point (b) is deleted;~~

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

~~Or. en~~

(ab) paragraph 3 is replaced by the following:

~~Justification~~

‘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.

~~To be removed consistently with the COM proposed removal of the pre-trade SSTI waiver.~~

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.

~~Amendment 37~~

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.’;

~~Proposal for a regulation~~

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

~~Article 1 – paragraph 6~~

▌

~~Regulation (EU) No 600/2014~~

~~Article 11~~

~~Text proposed by the Commission~~

~~Amendment~~

~~(6) Article 11 is amended as follows:~~

~~deleted~~

~~(a) paragraph 1 is amended as follows:~~

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

‘

‘Based on the deferral regime as set out in paragraph 4, competent authorities shall authorise market operators and investment firms operating a trading venue to defer the publication of the price of transactions until the end of the trading day, or the volume of transactions for a maximum of two weeks.’;

~~(ii) in the second subparagraph, point (c) is deleted;~~

~~(b) paragraph 3 is replaced by the following:~~

‘3. Competent authorities may, when authorising a deferred publication as referred to in paragraph 1 with regard to transactions in sovereign debt, allow market operators and investment firms operating a trading venue:

~~(a) to allow the omission of the publication of the volume of an individual transaction during an extended time period of deferral; or~~

~~(b) to publish in an aggregated form several transactions in sovereign debt for an indefinite period of time.’;~~

~~(c) paragraph 4 is amended as follows:~~

~~(i) the first subparagraph is amended as follows:~~

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

‘(c) the transactions eligible for price or volume deferral, and the transactions for which competent authorities shall authorise market operators and investment firms operating a trading venue to provide for deferred publication of the volume or price for one of the following durations:

~~(i) 15 minutes;~~

~~(ii) end of trading day;~~

~~(iii) two weeks.’;~~

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

~~‘For the purposes of the first subparagraph, point (c), ESMA shall specify the buckets for which the deferral period shall apply across the Union by using the following criteria:~~

~~(a) the liquidity determination;~~

~~(b) the size of the transaction, in particular transactions in illiquid markets or transactions that are large in scale;~~

~~(c) for bonds, the classification of the bond as investment grade or high yield.’;~~

~~Or. en~~

~~Amendment 38~~

~~Proposal for a regulation~~

~~Article 1 – paragraph 6 a (new)~~

~~Regulation (EU) No 600/2014~~

~~Article 11~~

~~Present text~~

~~Amendment~~

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

~~Article 11 Authorisation~~‘Authorisation of deferred publication

~~‘Article 11 Authorisation of deferred publication~~

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.

1. Competent authorities shall be able to authorise market operators and investment firms operating a trading venue to provide for deferred publication of the details of transactions based on the size or type of the transaction. In particular, the competent authorities may authorise the deferred publication in respect of transactions that:

1. Market operators and investment firms operating a trading venue may defer the publication of the details of transactions, including the price and the volume, until the end of the trading day. The publication of the volume of very large transactions may be deferred for an extended period not exceeding four weeks.

(a) are large in scale compared with the normal market size for that bond, structured finance product, emission allowance or derivative traded on a trading venue, or for that class of bond, structured finance product, emission allowance or derivative traded on a trading venue; or

(b) are related to a bond, structured finance product, emission allowance or derivative traded on a trading venue, or a class of bond, structured finance product, emission allowance or derivative traded on a trading venue for which there is not a liquid market;

(c) are above a size specific to that bond, structured finance product, emission allowance or derivative traded on a trading venue, or that class of bond, structured finance product, emission allowance or derivative traded on a trading venue, which would expose liquidity providers to undue risk and takes into account whether the relevant market participants are retail or wholesale investors.

Market operators and investment firms operating a trading venue shall obtain the competent authority’s prior approval of proposed arrangements for deferred trade-publication, and shall clearly disclose those arrangements 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.

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.

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

(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 ~~status~~ of the financial instrument.

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.

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~~three month period, it shall automatically lapse.

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.

~~3. Competent authorities may, in conjunction with an authorisation of deferred publication:~~

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:

~~3. 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:~~

(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

~~(a) request~~(b) the ~~publication~~deferral of ~~limited~~the ~~details~~publication of ~~a transaction or~~the details of several transactions in an aggregated ~~form, or a combination thereof, during the time~~form ~~period~~for ofsix ~~deferral;~~months.

~~(b) allow the omission of the publication of the volume of an individual transaction during an extended time period of deferral;~~

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.

~~(a)~~When the ~~omission~~deferral oftime period lapses, the ~~publication~~outstanding details of the ~~volume~~transaction ofand anall ~~individual~~the details of the transaction ~~during~~on an ~~extended~~individual ~~time~~basis ~~period~~shall ofbe ~~deferral;~~published.

~~(c) regarding non-equity instruments that are not sovereign debt, allow the publication of several transactions in an aggregated form during an extended time period of deferral;~~

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:

~~(d) regarding sovereign debt instruments, allow the publication of several transactions in an aggregated form for an indefinite period of time.~~

(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;

~~(b) the publication of the details of several transactions in an aggregated form for an indefinite period of time.~~

(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;

In relation to sovereign debt instruments, points (b) and (d) may be used either separately or consecutively whereby once the volume omission extended period lapses, the volumes could then be published in aggregated form.

(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);

In relation to all other financial instruments, when the deferral time period lapses, the outstanding details of the transaction and all the details of the transactions on an individual basis shall be published.

(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:

~~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 Article 64 of Directive 2014/65/EU:~~

~~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 as well as under Article 27g:~~

(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 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 possible including when trades are executed outside ordinary trading hours;~~

(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. ESMA shall regularly review that time limit and adjust it in line with technological developments;

(c) the conditions for authorising investment firms, including systematic internalisers, and market operators and investment firms operating a trading venue, to provide for deferred publication of the details of transactions for each class of financial instrument concerned in accordance with paragraph 1 of this Article and with Article 21(4);

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

(ca) for the purposes of determining the categories referred to in the third subparagraph of paragraph 1, the issuance sizes that qualify a financial instrument as belonging to a liquid or an illiquid market;

(cb) the price and volume deferrals applicable to each of the five categories set out in the third subparagraph of paragraph 1 of this Article for transactions in instruments referred to in paragraph 1 of this Article and Article 21(1).

~~For establishing the price and volume deferrals in paragraph 4(e), ESMA shall apply the following maximum durations:~~

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

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

For each of the ~~above~~categories ~~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 ~~research~~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 ~~window~~duration back to the previous ~~level;~~level.

(d) the criteria to be applied when determining the size or type of a transaction for which deferred publication and publication of limited details of a transaction, or publication of details of several transactions in an aggregated form, or omission of the publication of the volume of a transaction with particular reference to allowing an extended length of time of deferral for certain financial instruments depending on their liquidity, is allowed under paragraph 3.

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].

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.’;

~~ESMA shall submit those draft regulatory technical standards to the Commission by 3 July 2015.~~

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

~~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].~~

‘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.

~~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.~~

~~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.’;~~

~~Or. en~~

~~(https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A02014R0600-20220101)~~

~~Justification~~

Overhaul of Article 11, harmonizing the deferral periods for non-equities across the Union, in light of the fact that the current regime has resulted in limited post-trade transparency. Including different categories of deferrals based on the transaction size and the liquidity of the instruments. In the proposal, price can be deferred maximum until the end of the day for all transactions until very large ones - this should increase transparency and be beneficial for the CT. Longer deferrals (4 weeks) for very large transactions are introduced, to allow market makers enough time to manage their risks. It should be noted that the only evidence available from the implementation of well calibrated, yet ambitious deferrals regime in other jurisdictions points towards the fact that shorter deferrals have a positive impact on the spreads and are generally beneficial for market participants - while the impact on liquidity providers has been limited. Nonetheless, recognising the time it takes to unwind very large positions on certain instruments, longer deferrals for volumes, as well as a specific category for very large transaction may be warranted. Finally, paragraph 3 is also modified to avoid heterogeneous deferral regimes across MS in a given sovereign debt instrument. Given that proposed Art. 11 seeks to harmonise the regime for corporate bonds the current approach for sovereign bonds, where the NCAs allow (but do not mandate) the extended deferrals for sovereigns trading on venues within their jurisdiction is neither achieving the original objectives of the member states nor creating a harmonised approach. The better approach is to have each member state issuers determine the deferral regime for their own bonds which should be applied across the union.

~~Amendment 39~~

~~Proposal for a regulation~~

~~Article 1 – paragraph 6 b (new)~~

~~Regulation (EU) No 600/2014~~

~~Article 13 – paragraphs 1 and 2~~

~~Present text~~

~~Amendment~~

~~(6b) Article 13 is replaced by the following:~~

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

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

1. Market operators and investment firms operating a trading venue shall make the information published in accordance with Articles 3, 4 and 6 to 11 available to the public on a reasonable commercial basis and ensure non-discriminatory access to the information. Such information shall be made available free of charge 15 minutes after publication.

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. The Commission shall adopt delegated acts in accordance with Article 50 clarifying what constitutes a reasonable commercial basis to make information public as referred to in paragraph 1.~~

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.’;~~margins.

~~Or. en~~

3. ESMA shall develop draft regulatory technical standards to:

~~(https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A02014R0600-20220101)~~

(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;

~~Justification~~

(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;

Introducing a single RCB provision which applies to all data contributors, including the CTPs (to put all the data providers on a level playing field and to avoid that we create a new source of high data cost). It also specifies at level 1 that RCB means ‘on a cost basis’, and empowers ESMA to draft RTS further specifying the related obligations. Empowering NCAs and ESMA to request information to data provider on the actual cost of market data is not intended to introduce price controls, but to better understand the pricing of market data and to assess whether market data is provided on an RCB.

(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).

~~Amendment 40~~

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.

~~Proposal for a regulation~~

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

~~Article 1 – paragraph 7~~

~~Regulation (EU) No 600/2014~~

~~Article 13 – paragraph 3~~

~~Text proposed by the Commission~~

~~Amendment~~

3. ESMA shall develop draft regulatory technical standards to specify 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.

~~3. ESMA shall develop draft regulatory technical standards to~~

~~(b) specify the frequency, contact details and format of the information to be provided to the competent authorities and ESMA in accordance with paragraph 3.~~

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

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

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.’;

~~Or. en~~

(8) Article 14 is amended as follows:

~~(https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A02014R0600-20220101)~~

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

~~Justification~~

‘2. This Article and Articles 15, 16 and 17 shall apply to systematic internalisers when they deal in sizes up to the threshold determined by ESMA in accordance with Article 4(6)(ea). Systematic internalisers shall not be subject to this Article and Articles 15, 16 and 17 when they deal in sizes above that threshold.

3. Systematic internalisers ▌minimum quoting size shall be determined by ESMA in accordance with paragraph 7. For a particular share, depository receipt, ETF, certificate or other financial instrument that is similar to those financial instruments and that is traded on a trading venue, each quote shall include a firm bid and offer price, or firm bid and offer prices for a size or sizes which could be up to the threshold determined by ESMA in accordance with paragraph 7. The price or prices shall reflect the prevailing market conditions for that share, depositary receipt, ETF, certificate or financial instrument that is similar to those financial instruments.’;

~~Amendment 41~~

~~Proposal for a regulation~~

~~Article 1 – paragraph 8 – point a~~

~~Regulation (EU) No 600/2014~~

~~Article 14 – paragraph 2~~

~~Text proposed by the Commission~~

~~Amendment~~

2. This Article and Articles 15, 16 and 17 shall apply to systematic internalisers when they deal in sizes up to twice the standard market size. Systematic internalisers shall not be subject to this Article and Articles 15, 16 and 17 when they deal in sizes above twice the standard market size.

2. This Article and Articles 15, 16 and 17 shall apply to systematic internalisers when they deal in sizes up to the threshold determined by ESMA in accordance with Article 4(6)(ea). Systematic internalisers shall not be subject to this Article and Articles 15, 16 and 17 when they deal in sizes above that threshold.

~~Or. en~~

~~Justification~~

Empowering ESMA to define the threshold above which the SI requirements no longer apply. This would provide more flexibility than the Commission proposal which sets the threshold at twice the standard market size. A maximum threshold of 2xSMS is also defined at Level 1.

~~Amendment 42~~

~~Proposal for a regulation~~

~~Article 1 – paragraph 8 – point a~~

~~Regulation (EU) No 600/2014~~

~~Article 14 – paragraph 3~~

~~Text proposed by the Commission~~

~~Amendment~~

3. Systematic internalisers are allowed to quote any size. The minimum quoting size shall be at least the equivalent of twice the standard market size of a share, depositary receipt, ETF, certificate, or other financial instrument that is similar to those financial instruments and that is traded on a trading venue. For a particular share, depository receipt, ETF, certificate or other financial instrument that is similar to those financial instruments and that is traded on a trading venue, each quote shall include a firm bid and offer price, or firm bid and offer prices for a size or sizes which could be up to twice the standard market size for the class of shares, depositary receipts, ETFs, certificates or financial instruments that are similar to those financial instruments, to which the financial instrument belongs. The price or prices shall reflect the prevailing market conditions for that share, depositary receipt, ETF, certificate or financial instrument that is similar to those financial instruments.

3. Systematic internalisers' minimum quoting size shall be determined by ESMA and shall be lower than the threshold determined in accordance with Article 4(6)(ea). For a particular share, depository receipt, ETF, certificate or other financial instrument that is similar to those financial instruments and that is traded on a trading venue, each quote shall include a firm bid and offer price, or firm bid and offer prices for a size or sizes which could be up to the threshold determined by ESMA in accordance with Article 4(6)(ea). The price or prices shall reflect the prevailing market conditions for that share, depositary receipt, ETF, certificate or financial instrument that is similar to those financial instruments.;

~~Or. en~~

~~Justification~~

~~Same as above. First sentence is removed to enhance legal clarity, as in contrast with the proposed setting of a minimum quoting size.~~

~~Amendment 43~~

~~Proposal for a regulation~~

~~Article 1 – paragraph 8 – point b~~

~~Regulation (EU) No 600/2014~~

~~Article 14 - paragraph 6 a (new)~~

~~Text proposed by the Commission~~

~~Amendment~~

(b) the following paragraph 6a is inserted:

~~deleted~~

‘6a. ESMA shall, taking into consideration efficient valuation of shares, depositary receipts, ETFs, certificates and other similar financial instruments as well as the provision of favourable deals for investment firm clients, assess the appropriateness of the threshold for:

~~‘6a. Systematic internalisers shall not match orders at the mid-point within the current bid and offer prices.’;~~

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

~~Or. en~~

(b) the size below which this Article and Articles 15, 16 and 17 shall apply to systematic internalisers as referred to in paragraph 2;

~~Justification~~

~~With the changes above and to Article 17a, this paragraph is no longer relevant.~~

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

~~Amendment 44~~

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

~~Proposal for a regulation~~

On the basis of the assessment referred to in the first subparagraph, ESMA shall develop draft regulatory technical standards to modify the thresholds referred to in points (a)-(e), where appropriate.

~~Article 1 – paragraph 8 – point b a (new)~~

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

~~Regulation (EU) No 600/2014~~

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.’;

~~Article 14 – paragraph 7 – subparagraph 1~~

~~Present text~~

~~Amendment~~

(ba) in paragraph 7, the first subparagraph is replaced by the following:

In‘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 ~~whether prices reflect~~the ~~prevailing~~minimum ~~market~~quoting ~~conditions~~sizes as referred to in paragraph 3, and of the standard market size as referred to in ~~paragraphs 2 and~~paragraph 4.4.’

‘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.’;

(8a) Article 15 is amended as follows:

~~Or. en~~

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

~~(02014R0600-20220101)~~

‘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.

~~Amendment 45~~

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

~~Proposal for a regulation~~

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.’;

~~Article 1 – paragraph 9~~

(b) paragraph 5 is replaced by the following:

~~Regulation (EU) No 600/2014~~

‘5. ESMA shall develop draft implementing technical standards to determine the content and format of the description and notification referred to in paragraph 1.

~~Article 17a - paragraph 2~~

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

~~Text proposed by the Commission~~

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.’;

~~Amendment~~

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

2. The application of the tick sizes set in accordance with Article 49 of Directive 2014/65/EU shall not prevent systematic internalisers from matching orders large in scale at mid-point within the current bid and offer prices. Matching orders at mid-point within the current bid and offer prices below large in scale but above twice the standard market size shall be allowed in so far as those tick sizes are complied with.’;

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

2. The application of the tick sizes set in accordance with Article 49 of Directive 2014/65/EU shall not prevent systematic internalisers from matching orders at mid-point within the current bid and offer prices for sizes above the threshold determined by ESMA in accordance with Article 4(6)(ea).’;

(b) that firms that meet the definition of systematic internaliser comply with the conditions for price improvement laid down in Article 15(2).’;

~~Or. en~~

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

~~Justification~~

‘Article 17a Tick sizes

The amendments introduces a certain size to be defined by ESMA below which midpoint matching will be prohibited for both systematic internalisers and trading venues. The changes will allow midpoint matching to happen above this size ('a certain size to be defined by ESMA') for both on- and off-venue trading. This should ensure that EU SIs maintain their competitiveness, and brings the EU closer to alignment with third-countries’ provisions in this respect.

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.

~~Amendment 46~~

2. The application of the tick sizes set in accordance with Article 49 of Directive 2014/65/EU shall not prevent systematic internalisers from matching orders ▌at mid-point within the current bid and offer prices for sizes above the threshold determined by ESMA in accordance with Article 4(6)(ea).’;

~~Proposal for a regulation~~

~~Article 1 – paragraph 9 a (new)~~

~~Regulation (EU) No 600/2014~~

~~Article 18~~

~~Present text~~

~~Amendment~~

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

~~Article 18 Obligation~~‘Obligation for systematic internalisers to make public firm quotes in respect of bonds, structured finance products, emission allowances and derivatives

~~‘Article 18 Obligation for systematic internalisers to make public firm quotes in respect of bonds, structured finance products, emission allowances and derivatives~~

1. Investment firms shall make public firm quotes in respect of bonds, structured finance products, emission allowances and derivatives traded on a trading venue for which they are systematic internalisers and for which there is a liquid market when the following conditions are fulfilled:

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;

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

(b) they agree to provide a quote.

~~(b) they agree to provide a quote.~~

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

2. In relation to bonds, structured finance products, emission allowances and derivatives traded on a trading venue for which there is not a liquid market, systematic internalisers shall disclose quotes to their clients on request if they agree to provide a quote. That obligation may be waived where the conditions specified in Article 9(1) are met.

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.

~~3. Systematic internalisers may update their quotes at any time. They may withdraw their quotes under exceptional market conditions.~~

~~3. Systematic internalisers may update their quotes at any time.~~

4. Member States shall require that firms that meet the definition of systematic internaliser notify their competent authority. Such notification shall be transmitted to ESMA. ESMA shall establish a list of all systematic internalisers in the Union.

4. 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.

5. Systematic internalisers shall make the firm quotes published in accordance with paragraph 1 available to their other clients. Notwithstanding, they shall be allowed to decide, on the basis of their commercial policy and in an objective non-discriminatory way, the clients to whom they give access to their quotes. To that end, systematic internalisers shall have in place clear standards for governing access to their quotes. Systematic internalisers may refuse to enter into or discontinue business relationships with clients on the basis of commercial considerations such as the client credit status, the counterparty risk and the final settlement of the transaction.

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).

6. Systematic internalisers shall undertake to enter into transactions under the published conditions with any other client to whom the quote is made available in accordance with paragraph 5 when the quoted size is at or below the size specific to the financial instrument determined in accordance with Article 9(5)(d).

Systematic internalisers shall not be subject to the obligation to publish a firm quote pursuant to paragraph 1 for financial instruments that fall below the threshold of liquidity determined in accordance with Article 9(4).

~~7. Systematic internalisers shall not be subject to this Article when they deal in sizes above the size specific to the financial instrument determined in accordance with Article 9(5)(d).~~

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.

7. 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).

8.5. The quotes published pursuant to paragraph 1 ~~and 5 and those at or below the size referred to in paragraph 6~~ shall be made public in a manner which is easily accessible to other market participants on a reasonable commercial basis.

~~8. 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.

9. 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;

~~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.~~

~~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.’;~~

~~Or. en~~

~~(https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A02014R0600-20220101)~~

~~Justification~~

The transparency regime for non-equity SIs under the current Article 18 has revealed to be complex to implement and without clear impact on the transparency of SIs. This was reported by both market participants and supervisors.The amendment put forward the following modifications: :- paragraph 2: The obligation to provide quotes in illiquid on demand has revealed of limited value (not used in practice) and the proposed deletion would allow streamlining the regime;- paragraph 3: delete the reference to exceptional circumstances and allow SIs to withdraw their quotes at any point in time.- paragraphs 5-7: In practice, the regime includes too many safeguards which allows SIs to make these provisions redundant. If market participants might be interested to be made aware about the quotes provided by SIs (paragraph 1), they are less interested in trading directly at this price (OTC trading in non-equity instruments should reflect “the specific characteristics of the transaction contemplated, including in illiquid instruments and complex transactions, and of the requesting client”). The general practice is, in case a client also wants to trade in a quoted instrument, to prompt a new request to the SI.- paragraph 8 would have to be amended accordingly if the previous paragraphs are deleted/amended as suggested.In line with the principles underlying changes to Article 8 and 9 (removal of RFQ and voice-trading protocol), MEPs may want to consider whether Article 18 should be removed entirely (with the exception of paragraph 3 and possibly 5).

~~Amendment 47~~

~~Proposal for a regulation~~

~~Article 1 – paragraph 9 b (new)~~

~~Regulation (EU) No 600/2014~~

~~Article 19 - paragraph 2~~

~~Present text~~

~~Amendment~~

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

2. The Commission shall adopt delegated acts in accordance with Article 50 specifying the sizes referred to in Article 18(6) at which a firm shall enter into transactions with any other client to whom the quote is made available. The size specific to the financial instrument shall be determined in accordance with the criteria set in Article 9(5)(d).

~~Or. en~~

~~(https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A02014R0600-20220101)~~

~~Justification~~

~~Deleted in line with changes to Article 18.~~

~~Amendment 48~~

~~Proposal for a regulation~~

~~Article 1 – paragraph 9 c (new)~~

~~Regulation (EU) No 600/2014~~

~~Article 20 – paragraph 2 a (new) and paragraph 3 point c~~

~~Present text~~

~~Amendment~~

(9c) Article 20 is amended as follows:

(a) the following paragraph is inserted:

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

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

~~(c) the party to a transaction that has to make the transaction public in accordance with paragraph 1 if both parties to the transaction are investment firms.~~

(9d) Article 21 is amended as follows:

~~Or. en~~

~~Justification~~

(a) a transaction should be made public only through a single APA also for equity instruments. Today, despite a complex system on Level 2 to avoid potential double-reporting, there remain problems in the application, and clarifying this on Level 1 seems to be the clearer solution. This additional paragraph would ensure the post-trade information is only made once through a single APA also in the case of equity/equity-like financial instruments.

~~(b) Removes ESMAs powers to specify reporting hierarchy since it is now included in the Designated Reporting Entity Article~~

~~Amendment 49~~

~~Proposal for a regulation~~

~~Article 1 – paragraph 9 e (new)~~

~~Regulation (EU) No 600/2014~~

~~Article 21~~

~~Text proposed by the Commission~~

~~Amendment~~

~~(9e) Article 21 is amended as follows:~~

(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, emission allowances and derivatives traded on a trading venue 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.

‘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, or derivatives subject to the clearing obligation set out in Article 4 of Regulation (EU) No 648/2012, 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 4 is replaced by the following:

4.‘4. Competent authorities shall be able to authorise investment firms to provide for deferred ~~publication, or may request the~~ publication of ~~limited details of a transaction or details of several transactions in an aggregated form, or a combination thereof, during the time period of the deferral~~price or ~~may allow the omission of the publication of the~~ volume for individual transactions during an extended time period of deferral, or in the case of non-equity financial instruments that are not sovereign debt, may allow the publication of several transactions in an aggregated form during an extended time period of deferral, or in the case of sovereign debt instruments may allow the publication of several transactions in an aggregated form for an indefinite period of time, and may temporarily suspend the obligations referred to in paragraph 1 on the same conditions as laid down in ~~Article~~Articles ~~11.~~11.’;

‘4. Investment firms may provide for deferred publication of transactions referred to in paragraph 1 of this Article and may temporarily suspend the obligations referred to in that paragraph on the same conditions as laid down in Article 11.’;

~~(c) paragraph 5, introductory part, is replaced by the following:~~

~~ESMA shall submit those draft regulatory technical standards to the Commission by 3 July 2015.~~

‘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:’;

~~(c) the party to a transaction that has to make the transaction public in accordance with paragraph 1 if both parties to the transaction are investment firms.~~

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

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

(9e) the following Article is inserted:

~~Or. en~~

‘Article 21a

~~Justification~~

Introduces derivatives subject to the clearing obligations into scope of OTC transparency and removes ToTV for derivatives. Also shortens paragraph 4 to take into account new deferrals as well as the removal of ToTV for deferrals

~~Amendment 50~~

~~Proposal for a regulation~~

~~Article 1 – paragraph 9 f (new)~~

~~Regulation (EU) No 600/2014~~

~~Article 21 a (new)~~

~~Text proposed by the Commission~~

~~Amendment~~

~~(9f) the following Article is inserted:~~

~~'Article 21a~~

Designated reporting entity

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.

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

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.';~~entities.’;

~~Or. en~~

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

~~Justification~~

‘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:’;

Introduces a designated reporting entity regime, as part of the decoupling of the SI status from the reporting obligation. This change is strongly supported by most market participants, and is expected to reduce the burden on smaller investment firms, provide additional clarity for market participants on who will be reporting trades, improve transaction reporting and reduce the number of SIs in the Union (leading to a more realistic picture of the markets).

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

~~Amendment 51~~

‘Article 22a Provision of market data to the CTP

~~Proposal for a regulation~~

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.

~~Article 1 – paragraph 9 g (new)~~

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.

~~Regulation (EU) No 600/2014~~

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 22 – paragraph 1 – introductory part~~

(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

~~Present text~~

(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.

~~Amendment~~

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.

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

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.

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, ESMA and competent authorities may require information from:

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.

‘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 European 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. 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.

~~Or. en~~

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).

~~(https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A02014R0600-20220101)~~

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.

~~Justification~~

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.

This addition would allow ESMA to collect data on a per waiver and per deferral basis for both equity and non-equity. At the moment ESMA is in a position only to collect information on the equity waivers excluding OMF on the basis of the calculations for the tick-size parameter and on the request to perform this calculations.The collection of data in a more granular fashion would allow ESMA to provide more accurate reports, better monitor the application of waivers and deferrals, to better inform policy decisions

Article 22b Market data quality

~~Amendment 52~~

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.

~~Proposal for a regulation~~

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

~~Article 1 – paragraph 10~~

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.

~~Regulation (EU) No 600/2014~~

The expert stakeholder group shall elect a Chair from among its members. The position of 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.

~~Article 22a – paragraph 1~~

2. ESMA shall develop draft regulatory technical standards to specify, where necessary, 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.

~~Text proposed by the Commission~~

~~Amendment~~

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 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.

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 and regulatory data as set out 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.

~~Or. en~~

~~Amendment 53~~

~~Proposal for a regulation~~

~~Article 1 – paragraph 10~~

~~Reguation (EU) No 600/2014~~

~~Article 22a – paragraph 1 a (new)~~

~~Text proposed by the Commission~~

~~Amendment~~

~~1a. Regulated markets whose average daily trading volume of shares represents less than 1 % of the average daily trading volume of the Union shall not be required to provide market data to the CTP;~~

~~Or. en~~

~~Justification~~

~~Introduces exclusion mechanism for smaller regulated markets. Paragraph 2 introduces a first-level threshold related to the market share.~~

~~Amendment 54~~

~~Proposal for a regulation~~

~~Article 1 – paragraph 10~~

~~Regulation (EU) No 600/2014~~

~~Article 22a – paragraph 2 a (new)~~

~~Text proposed by the Commission~~

~~Amendment~~

~~2a. Regulated markets whose average daily trading volume of shares exceeds 1 % of the average trading volume of the Union shall not be required to provide market data to the CTP if:~~

~~(i) the regulated market accounts for more than 70 % of the average daily trading volume of shares that were first admitted to trading on that regulated market; or~~

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

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

~~Or. en~~

~~Justification~~

Introduces exclusion mechanism for smaller regulated markets. Should market share exceeds 1% (paragraph 2 first threshold) but the exchange continues to present low levels of fragmentation as the shares admitted to the venue are also mostly traded in that venue, then a second-level threshold is inserted. Please note that the two fragmentation criteria apply alternatively, not cumulatively (thereby maximising options for exemption). Please refer to the explanatory note for further details on the rationale and the goals of this exemption.

~~Amendment 55~~

~~Proposal for a regulation~~

~~Article 1 – paragraph 10~~

~~Regulation (EU) 600/2014~~

~~Article 22a – paragraph 2 b (new)~~

~~Text proposed by the Commission~~

~~Amendment~~

2b. Notwithstanding paragraphs 2 and 2a, smaller regulated markets may decide to provide market data to the CTP, subject to the provisions of paragraph 1, by notifying ESMA. Those regulated markets that decide to subject themselves to the requirement to provide market data in accordance with paragraph 1 should start providing market data to the CTP within 30 working days of the date of the notification to ESMA.

~~Or. en~~

~~Justification~~

Despite the possibility for exemption, the consolidated tape may represent a viable way for smaller regulated markets to enhance their visibility to ‘outside’ investors - both within the Union and outside - and increase their market share. This will be coherent with the goals of the CMU, and will increase the size and the attractiveness of the EU capital markets as a whole. For this reason, an opt-in provision is inserted, should smaller regulated markets voluntarily decide to participate to the mandatory contribution scheme.

~~Amendment 56~~

~~Proposal for a regulation~~

~~Article 1 – paragraph 10~~

~~Regulation (EU) No 600/2014~~

~~Article 22a – paragraph 3~~

~~Text proposed by the Commission~~

~~Amendment~~

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 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.

~~Or. en~~

~~Justification~~

~~Transactions to the CTP should only be reported by an APA to avoid double reporting. Pre-trade data, however, can also be communicated by investment firms directly.~~

~~Amendment 57~~

~~Proposal for a regulation~~

~~Article 1 – paragraph 10~~

~~Regulation (EU) No 600/2014~~

~~Article 22a – paragraph 4~~

~~Text proposed by the Commission~~

~~Amendment~~

~~4. Market data contributors shall not receive any remuneration for the market data provided other than the revenue sharing as referred to in Article 27da(2), point (c).~~

~~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).~~

~~Or. en~~

~~Amendment 58~~

~~Proposal for a regulation~~

~~Article 1 – paragraph 10~~

~~Regulation (EU) No 600/2014~~

~~Article 22a – paragraph 5~~

~~Text proposed by the Commission~~

~~Amendment~~

~~5. Market data contributors shall provide the information with regard to waivers and deferrals as laid down in Articles 4, 7, 11, 14, 20 and 21.~~

~~5. Market data contributors shall provide the information respecting the deferrals as laid down in Articles 7, 11, 20 and 21.~~

~~Or. en~~

~~Amendment 59~~

~~Proposal for a regulation~~

~~Article 1 – paragraph 10~~

~~Regulation (EU) No 600/2014~~

~~Article 22b - paragraph 1~~

~~Text proposed by the Commission~~

~~Amendment~~

1. The Commission shall set up an expert stakeholder group by [OP add 3 months as of entry into force] to provide advice on the quality and the substance of market data, the common interpretation of market data and the quality of the transmission protocol referred to in Article 22a(1). The expert stakeholder group shall provide advice on a yearly basis. That advice shall be made public.

1. The Commission shall set up an expert stakeholder group by [OP add 3 months as of entry into force] 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). The expert stakeholder group shall provide advice on a yearly basis through a dedicated report. That advice shall be made public.

~~Or. en~~

~~Justification~~

Limit the scope of the Commission’s market data expert group, which should only provide advice on the consolidated tape output as to ensure that the CT is effective and its value for EU market participants is maximised. The expert group should not be providing advice on market data interpretation or market data standards beyond the scope of the CT output, which should be left to ESMA.

~~Amendment 60~~

~~Proposal for a regulation~~

~~Article 1 – paragraph 10~~

~~Regulation (EU) No 600/2014~~

~~Article 22b (new) – paragraph 2 – subparagraph 1~~

~~Text proposed by the Commission~~

~~Amendment~~

~~2. The Commission shall be empowered to adopt delegated acts in accordance with Article 50 to specify the quality and the substance of the market data and the quality of the transmission protocol.~~

~~2. ESMA shall develop draft regulatory technical standards to specify the quality and the substance of the core market data and the quality of the transmission protocol.~~

~~Or. en~~

~~Justification~~

Empowers ESMA to adopt RTS with respect to the CT input and output. ESMA should remain in charge of setting data standards, in order to avoid contradicting indications and practices and to ensure that indications to market participants are clear and coherent. As the CT is prevalently a tool for market participants, the objective of the RTS should be to minimise disruptions in the market, and to ensure that the substance and the format of market data for the CTP is readily usable, and that the CT output is intelligible for all market participants.

~~Amendment 61~~

~~Proposal for a regulation~~

~~Article 1 – paragraph 10~~

~~Regulation (EU) No 600/2014~~

~~Article 22b (new) – paragraph 2 – subparagraph 2 – introductory part~~

~~Text proposed by the Commission~~

~~Amendment~~

~~Those delegated acts shall in particular specify all of the following:~~

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

~~Or. en~~

(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;

~~Justification~~

(b) any data fields required to be contributed to and by the CTP in addition to core market data as referred to in Article 2(1)(36b) and▌ regulatory data as referred to in Article 2(1)(36c);

~~See justification of previous amendment.~~

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

~~Amendment 62~~

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.

~~Proposal for a regulation~~

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].

~~Article 1 – paragraph 10~~

~~Regulation (EU) No 600/2014~~

Article 22c Synchronisation of business clocks

~~Article 22b (new) – paragraph 2 – subparagraph 2 – point a~~

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

~~Text proposed by the Commission~~

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.

~~Amendment~~

ESMA shall submit those draft regulatory technical standards to the Commission by [OP insert a date 6 months as of entry into force].

~~(a) the market data, contributors need to provide to the CTP in order to produce the core market data needed for the CTP to be operational, including the substance and the format of those market data;~~

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.’;

(a) the market data contributors need to provide to the CTP in order to produce the core market data needed for the CTP to be operational, including the substance and the format of those market data, in accordance with prevailing industry standards and practices

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

~~Or. en~~

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

~~Justification~~

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

~~See justification of previous amendment.~~

(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.

~~Amendment 63~~

▌

~~Proposal for a regulation~~

(11a) Article 25 is amended as follows:

~~Article 1 – paragraph 10~~

(a) paragraph 2 is replaced by the following:

~~Regulation (EU) No 600/2014~~

~~Article 22b (new) – paragraph 2 – subparagraph 3~~

~~Text proposed by the Commission~~

~~Amendment~~

For the purposes of the first subparagraph, the Commission shall take into account the advice from ESMA and from the technical expert group established in accordance with paragraph 2, international developments, and standards agreed at Union or international level. The Commission shall ensure that the delegated acts adopted take into account the reporting requirements laid down in Articles 3, 6, 8, 10, 14, 18, 20, 21 and 27g.

For the purposes of the first subparagraph, ESMA shall take into account the advice from the technical expert group established in accordance with paragraph 1, and shall take into account international developments and standards agreed at Union or international level. ESMA shall ensure that the draft regulatory technical standards adopted take into account the reporting requirements laid down in Articles 3, 6, 10, 14, 20, 21, 22, 26, 27 and 27g.

~~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.~~

~~Or. en~~

~~Justification~~

~~See justification of previous amendment.~~

~~Amendment 64~~

~~Proposal for a regulation~~

~~Article 1 – paragraph 11~~

~~Regulation (EU) No 600/2014~~

~~Article 23 – paragraph 1– subparagraph 2~~

~~Text proposed by the Commission~~

~~Amendment~~

~~ESMA shall publish a list on its website containing the shares with an EEA ISIN subject to the share trading obligation and shall update that list regularly.;~~

~~deleted~~

~~Or. en~~

~~Justification~~

The use of ISIN to define the scope of the STO is self-explanatory, since the first letters of the ISIN are enough to identify EEA ISINs. It thus does not need to be further specified in a list which would mainly create administrative work and additional efforts for ESMA and for market participants that will have to check the list and integrate it in their trading system before trading.

~~Amendment 65~~

~~Proposal for a regulation~~

~~Article 1 – paragraph 11 a (new)~~

~~Regulation (EU) No 600/2014~~

~~Article 25 – paragraph 2~~

~~Present text~~

~~Amendment~~

~~(11a) in Article 25, 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. 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.

‘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. 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.’;

~~Or. en~~

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

~~(https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A02014R0600-20220101)~~

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

~~Justification~~

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

Standardisation of order data would be beneficial for NCAs, that could (a) more easily analyse order data requested to any trading venue in the EU, thereby contributing to a more effective markets surveillance ; (b) allow trading venues to use the same recording and reporting system with any NCA in the EU, avoiding costs linked to compliance with diverging national standards, and (c) align the standardisation of order book data to that of transaction data, thereby ensuring a more consistent treatment of the two categories.

‘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.

~~Amendment 66~~

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 of relevant markets also receive that information.

~~Proposal for a regulation~~

~~Article 1 – paragraph 11 b (new)~~

~~Regulation (EU) No 600/2014~~

~~Article 25 – paragraph 3 – subparagraph 1~~

~~Present text~~

~~Amendment~~

~~(11b) in Article 25, paragraph 3, the first subparagraph is replaced by the following:~~

3. ESMA shall develop draft regulatory technical standards to specify the details of the relevant order data required to be maintained under paragraph 2 of this Article that is not referred to in Article 26.

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

~~Or. en~~

~~(https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A02014R0600-20220101)~~

~~Justification~~

~~Same as previous amendment.~~

~~Amendment 67~~

~~Proposal for a regulation~~

~~Article 1 – paragraph 11 c (new)~~

~~Regulation (EU) No 600/2014~~

~~Article 26 – paragraph 1~~

~~Present text~~

~~Amendment~~

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

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.

‘1. Investment firms, AIFMs as defined in Article 4b of Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers, and UCITS managers, as defined in Article 2.1b of Directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS), providing services defined under Article 4(2) of Directive 2014/65/EU on markets in financial instruments, 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.

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

~~The competent authorities shall establish the necessary arrangements in order to ensure that the information can be shared with other competent authorities upon request.’;~~

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.

~~Or. en~~

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.’;

~~(https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A02014R0600-20220101)~~

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

~~Justification~~

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

Ensuring a level playing field between the AIFM/UCITS firms based in jurisdictions with local requirements to obtain the relevant information for market abuse purposes and those based in the jurisdictions where such requirements are not in place. It will also ensure a level playing field among the MiFID Investment Firms and AIFM/UCITS management companies providing one or more MiFID services to third parties; especially since a move from operating under a MiFID Investment Firm license to being licensed under AIFMD or UCITS Directive has been observed by some NCAs. Also addresses the fact that the current MiFIR provisions do not allow for a broad exchange of MiFIR transaction data among NCAs because data can only be exchanged with the competent authority “of the most relevant market in terms of liquidity”. Such a narrow reference does not allow for an exchange that adequately reflect NCAs’ evolving supervisory needs to monitor the most recent market developments. In line with the principles outlined in the Commission data strategy to maximise the potential usage of transaction reporting for all suitable purposes and avoid duplication of reporting flows. Amendment permits NCAs to share transaction reports for wider purposes.

~~Amendment 68~~

~~Proposal for a regulation~~

~~Article 1 – paragraph 11 d (new)~~

~~Regulation (EU) No 600/2014~~

~~Article 26 – paragraph 2~~

~~Present text~~

~~Amendment~~

~~(11d) in Article 26, paragraph 2 is replaced by the following:~~

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

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

~~(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;~~

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

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

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

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

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

~~The obligation shall apply to transactions in financial instruments referred to in points (a) to (c) 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:

~~The obligation shall apply to transactions in financial instruments referred to in points (a) to (c) 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.’;

~~Or. en~~

(11e) in Article 26, paragraph 5 is replaced by the following:

~~(https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A02014R0600-20220101)~~

~~Justification~~

Transaction reporting amendments to accommodate new scope OTC reporting of derivatives. The ToTV criterion is kept here in addition to the new scope for OTC transactions because there is a Market Abuse element to transaction reporting which requires full information of everything related to trading venues.

~~Amendment 69~~

~~Proposal for a regulation~~

~~Article 1 – paragraph 11 e (new)~~

~~Regulation (EU) No 600/2014~~

~~Article 26 – paragraph 3~~

~~Present text~~

~~Amendment~~

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

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 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, means of identifying the investment firms concerned, and a designation to identify a short sale as defined in Article 2(1)(b) of Regulation (EU) No 236/2012 in respect of any shares and sovereign debt within the scope of Articles 12, 13 and 17 of that Regulation. 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.

‘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, 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.’;

~~Or. en~~

~~(https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A02014R0600-20220101)~~

~~Justification~~

~~Proposal aims to ensure consistency with revised EMIR TS~~

~~Amendment 70~~

~~Proposal for a regulation~~

~~Article 1 – paragraph 11 f (new)~~

~~Regulation (EU) No 600/2014~~

~~Article 26 – paragraph 5~~

~~Present text~~

~~Amendment~~

~~(11f) in Article 26, paragraph 5 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 a firm which is not subject to this Regulation in accordance with paragraphs 1 and 3.

‘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.’;

~~Or. en~~

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

~~(https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A02014R0600-20220101)~~

‘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.’;

~~Justification~~

The term ‘any member, participant or user’ is more precise than the term 'firm' and would clearly encompass any entity that executes transaction on trading venues. This approach: (i) ensures that the information on the trading activity on a given trading venue is complete and consistent with the information provided by other trading venues (ii) ensures a better alignment with the order record keeping requirements under Article 25 of MiFIR (iii) will have a positive impact on the application of reporting rules under the DLT Pilot regime

~~Amendment 71~~

~~Proposal for a regulation~~

~~Article 1 – paragraph 11 g (new)~~

~~Regulation (EU) No 600/2014~~

~~Article 26 – paragraph 6 – subparagraph 1~~

~~Present text~~

~~Amendment~~

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

6. In reporting the designation to identify the clients as required under paragraphs 3 and 4, investment firms shall use a legal entity identifier established to identify clients that are legal persons.

‘6. 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.’;

~~Or. en~~

~~(https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A02014R0600-20220101)~~

~~Justification~~

Explicits that the obligation to use the LEI applies to all entities that are eligible for the LEI regardless of their legal status and the way in which they are financed, and is in line with ESMA MiFIR review report on transaction reporting and the commission’s FAQ on EMIR. Market participants would incur an initial cost for collecting from their systems the information on client category and adapting the reporting scheme, but this cost would be lower than the set-up of a specific new reporting system to provide this information to their NCA.

~~Amendment 72~~

~~Proposal for a regulation~~

~~Article 1 – paragraph 12~~

~~Regulation (EU) No 600/2014~~

~~Article 26 – paragraph 9~~

~~Text proposed by the Commission~~

~~Amendment~~

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

~~deleted~~

▌

(a) the ~~following point~~first ~~(j)~~subparagraph is ~~added:~~amended as follows:

~~‘(j) the date by which transactions are to be reported.’;~~

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

~~(b) the following subparagraph is inserted after the first subparagraph:~~

‘(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;’;

‘When drafting those regulatory technical standards, ESMA shall take into account international developments and standards agreed upon at Union or global level, and their consistency with the reporting requirements laid down in Regulation (EU) 2019/834 and Regulation (EU) 2015/2365.’;

(ii) point (d) is deleted;

~~Or. en~~

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

~~Amendment 73~~

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

~~Proposal for a regulation~~

(iv) the following points are added:

~~Article 1 – paragraph 12 a (new)~~

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

~~Regulation (EU) No 600/2014~~

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

~~Article 26 – paragraph 9~~

(b) the second subparagraph is replaced by the following:

~~Present text~~

‘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].’;

~~Amendment~~

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

~~(12a) in Article 26, paragraph 9 is replaced by the following:~~

‘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:

~~9. ESMA shall develop draft regulatory technical standards to specify:~~

(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;

~~‘9. ESMA shall develop draft regulatory technical standards to specify:~~

(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.

(a) data standards and formats for the information to be reported in accordance with paragraphs 1 and 3, including the methods and arrangements for reporting financial transactions and the form and content of such reports;

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.

________________________________________________________

~~(b) the criteria for defining a relevant market in accordance with paragraph 1;~~

*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)’;

~~(b) the criteria for defining a relevant market in accordance with paragraph 1;~~

(14) Article 27▌ 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; and

(-a) in paragraph 1, 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 the transparency requirements under Articles 3, 6, 8, 8a, 10, 11, 11a, 14, 20 and 21.

~~(d) the designation to identify short sales of shares and sovereign debt as referred to in paragraph 3;~~

With regard to derivatives, identifying reference data shall be based and further developed on globally agreed international standard used for identifying reference data as derivative identifiers.’;

~~(e) the relevant categories of financial instrument to be reported in accordance with paragraph 2;~~

(a) paragraph 3 is amended as follows;

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

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

(f) the conditions upon which legal entity identifiers are developed, attributed and maintained, by Member States in accordance with paragraph 6, and the conditions under which those legal entity identifiers are used by investment firms so as to provide, pursuant to paragraphs 3, 4 and 5, for the designation to identify the clients in the transaction reports they are required to establish pursuant to paragraph 1;

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

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

~~(g) the application of transaction reporting obligations to branches of investment firms;~~

‘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) 2019/834 and Regulation (EU) 2015/2365.’;

~~(g) the application of transaction reporting obligations to branches of investment firms;~~

~~(h) what constitutes a transaction and execution of a transaction for the purposes of this Article.~~

~~(h) what constitutes a transaction and execution of a transaction for the purposes of this Article;~~

~~(i) when an investment firm is deemed to have transmitted an order for the purposes of paragraph 4.~~

~~(i) when an investment firm is deemed to have transmitted an order for the purposes of paragraph 4;~~

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

~~(ib) the date by which transactions are to be reported.~~

~~ESMA shall submit those draft regulatory technical standards to the Commission by 3 July 2015.~~

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

~~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.~~

~~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.’;~~

~~Or. en~~

~~(02014R0600-20220101)~~

~~Amendment 74~~

~~Proposal for a regulation~~

~~Article 1 – paragraph 14 a (new)~~

~~Regulation (EU) No 600/2014~~

~~Article 27d~~

~~Present text~~

~~Amendment~~

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

(a) the title is replaced by the following:

~~Article 27d~~

‘Article 27d

~~Procedures for granting and refusing applications for authorisation~~

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

(b) ~~paragraph~~paragraphs 11-3 isare replaced by the following:

1.‘1. The applicant ~~data reporting~~APA ~~services~~or ~~provider~~ARM shall submit an application providing all information necessary to enable ESMA, or the national competent authority where relevant, to confirm that the ~~data reporting~~APA ~~services~~or ~~provider~~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.

‘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.’;

2. ESMA, or the national competent authority where relevant, shall assess whether the application for authorisation is complete within 20 working days of receipt of the application.

~~(c) paragraph 3 is replaced by the following:~~

Where the application is not complete, ESMA, or the national competent authority where relevant, shall set a deadline by which the APA or ARM is to provide additional information.

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 data reporting services provider with this Title. It shall adopt a fully reasoned decision granting or refusing authorisation and shall notify the applicant data service provider accordingly within five working days.

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

~~‘3.~~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.’;

~~Or. en~~

(15) the following Article 27da is inserted:

~~(https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A02014R0600-20220101)~~

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

~~Justification~~

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:

~~The scope of this Article should be limited to ARM and APAs, to align with the proposal to cover the authorisation procedure for CTPs in Article 27db.~~

(a) bonds;

~~Amendment 75~~

(b) shares and ETFs;

~~Proposal for a regulation~~

~~Article 1 – paragraph 15~~

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

~~Regulation (EU) No 600/2014~~

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:

~~Article 27d a (new)~~

~~Text proposed by the Commission~~

~~Amendment~~

~~(15) the following Article is inserted:~~

~~Article 27da~~

~~‘Article 27da~~

~~Selection process for the authorisation of a single consolidated tape provider for each asset class~~

~~Process for the selection of consolidated tape providers~~

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 each of the following asset classes: shares, exchange traded funds, bonds and derivatives (or relevant subclasses of derivatives).

1. By ... [three months after the date of entry into force of the delegated act under Article22b(2)], 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 each asset class prioritising bonds and shares and ETFs over derivatives. Each selection procedure shall be initiated no later than six months following the initiation of the preceding one.

~~2. For each of the asset classes referred to in paragraph 1, ESMA shall assess the applications on the basis of the following criteria:~~

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

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

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

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

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

(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;

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

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

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

~~(c) the adequacy of the governance structure of the applicant;~~

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

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

~~(e) the capacity of the applicants to disseminate good quality data;~~

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

(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;

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

(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;

~~(g) the level of the fees that the applicant intends to charge to the different types of users of the 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;

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

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

~~(i) the storage medium the applicants will use for the storage of historic data;~~

(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;

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

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

~~(j) the protocols the applicants will use to prevent and address outages.~~

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).

~~(j) the ability to ensure regularity resilience and business continuity ;~~

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.

3. The first selection procedure organised for shares shall only invite bids for the provision of a consolidated tape containing post trade data. Prior to subsequent selection procedures, ESMA shall assess market demand and revenue impacts on regulated markets and based on that assessment, report to the Commission on the opportunity of adding best bids and offers and corresponding volumes to the tape. Based on that report and on the experience gained further to the first selection procedure, the Commission is empowered to adopt a delegated act specifying the appropriate level of pre-trade data to be contributed to the CTP.

▌

3. The selection of the CTP for shares and ETFs shall, in addition to the criteria in paragraph 2 of this Article, consider the revenue redistribution scheme, and in particular the formula, applicable to smaller regulated markets that decide to voluntarily opt in to the mandatory contribution of market data, in accordance with Article 22a(2b). This revenue shall be distributed in accordance with Article 27h(1)(c), and in a manner commensurate to the level of contribution to the price formation process of market data contributed in accordance with Article 22a.

▌

4. The selection of the CTP for shares shall, in addition to the criteria in paragraph 2, consider the revenue participation scheme, and in particular the formula, applicable to regulated markets that are market data contributors. ESMA shall, when considering the competing tenders, select the CTP for shares that offers the revenue participation scheme that provides regulated markets, in particular smaller regulated markets, with the highest amount of revenue that remains for distribution once deducted operating costs and a reasonable margin. This revenue shall be distributed in accordance with Article 27h(1)(c), and in a manner commensurate to the market data contributed according to Article 22a.

▌

4. 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 within six months from the initiation of the selection procedure referred to in paragraph 1.

~~(Restructuring of Article compared to the Commission proposal - in light of inclusion of Article 27db.)~~

~~Or. en~~

~~Amendment 76~~

~~Proposal for a regulation~~

~~Article 1 – paragraph 15 a (new)~~

~~Regulation (EU) No 600/2014~~

~~Article 27d b (new)~~

~~Present text~~

~~Amendment~~

(15a) the following Article is inserted:

‘Article 27db

~~Authorisation~~Process ~~process~~for ofthe ~~consolidated~~authorisation ~~tape~~of ~~providers~~CTPs

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.

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

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

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 ~~CTP~~applicant with this Title. It shall adopt a fully reasoned decision granting or refusing authorisation and shall notify the applicant ~~CTP~~ accordingly within five working ~~days.~~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)~~27da(2)(g), as indicated by the applicant, and, for shares, the level of the participation as referred to in ~~paragraph 4~~Article of27h(1), ~~that~~point ~~Article.’;~~(c).

~~Or. en~~

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.

~~Justification~~

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.

Include a new, specific article on CTP authorisation. The procedure is in line with the authorisations of any market infrastructure and it is necessary to distinguish the selection procedure from the authorisation one to avoid: 1) CTP to sustain all compliance costs without been selected; 2) ESMA to authorise a CTP without assessing its compliance.This includes provision moved from Article 27 da, and others in line from Article 27c, but adapted to CTPs.

4. The withdrawal of the authorisation referred to in Article 27e shall only take effect when a new CTP has been selected and authorised in accordance with Articles 27da and 27db.

~~Amendment 77~~

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

~~Proposal for a regulation~~

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

~~Article 1 – paragraph 15 b (new)~~

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

~~Regulation (EU) No 600/2014~~

~~Article 27e – paragraph 2 a (new)~~

6. 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).

~~Text proposed by the Commission~~

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.

~~Amendment~~

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

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

~~Or. en~~

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

~~Justification~~

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

EMIR provides that TRs for which authorisation is withdrawn shall orderly transfer their data to the other TRs, to avoid major data quality disruptions which may be caused by data loss or duplication.There is currently no equivalent provision for ARMs, and we would suggest introducing it.This would ensure alignment with EMIR and SFTR and preserve data quality in case of ARMs ceasing to provide the service.

‘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.’;

~~Amendment 78~~

(b) paragraph 4 is replaced by the following:

~~Proposal for a regulation~~

‘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.’;

~~Article 1 – paragraph 15 c (new)~~

~~Regulation (EU) No 600/2014~~

‘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).

~~Article 27f~~

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. It shall allow reporting entities to access specific services separately.

~~Present text~~

4b. APAs shall keep and preserve records relating to their business for at least five years. The information concerning the first two years shall be kept in an easily accessible place, and the APA shall provide such records to ESMA without delay upon request.’;

~~Amendment~~

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

~~(15c) Article 27f is replaced by the following:~~

‘Article 27h

1. The management body of a data reporting services provider shall at all times be of sufficiently good repute, possess sufficient knowledge, skills and experience and commit sufficient time to perform their duties.

Organisational requirements for CTPs

‘1. The management body of a data reporting services provider shall at all times be of sufficiently good repute, possess sufficient knowledge, skills and experience and commit sufficient time to perform their duties.

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

The management body shall possess adequate collective knowledge, skills and experience to be able to understand the activities of the data reporting services provider. Each member of the management body shall act with honesty, integrity and independence of mind to effectively challenge the decisions of the senior management where necessary and to effectively oversee and monitor management decision-making where necessary.

(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, while providing free access to 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;

Where a market operator seeks authorisation to operate an APA, a CTP or an ARM pursuant to Article 27d and the members of the management body of the APA, the CTP 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.

(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 Article 27da(3);

Where a market operator seeks authorisation to operate an APA or an ARM pursuant to Article 27c if it fulfils the criteria for derogation of ESMA supervision and 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.

(d) make consolidated 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 in Article 22b to users into a continuous electronic data stream on non-discriminatory terms as close to real time as technically possible;

2. A data reporting services provider shall notify to ESMA, or the national competent authority where relevant, the names of all members of its management body and any changes to its membership, along with all information needed to assess whether the entity complies with paragraph 1.

▌

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

3. The management body of a data reporting services provider shall define and oversee the implementation of the governance arrangements that ensure effective and prudent management of an organisation, including the segregation of duties in the organisation and the prevention of conflicts of interest, and in a manner that promotes the integrity of the market and the interest of its clients.

(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;

(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.

4. ESMA, or the national competent authority where relevant, shall refuse 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.

▌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.

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.

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.

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 service 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. It shall allow reporting entities to access specific services separately. The prices and fees charged by an APA shall be cost-related.

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:

5. ESMA shall develop draft regulatory technical standards by 1 January 2021 for the assessment of the suitability of the members of the management body described in paragraph 1, taking into account different roles and functions carried out by them and the need to avoid conflicts of interest between members of the management body and users of the APA, CTP or ARM.

(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].

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

~~Or. en~~

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

~~(https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A02014R0600-20220101)~~

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

~~Justification~~

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

Changes to paragraph 1 in order to guarantee a proper supervision by ESMA of the conditions of authorisation, a clarification is needed that this paragraph only applies to DRSPs that are subject to the national supervision.Changes to paragraph 4 to include the possibility of the withdrawal of the authorisation for two reasons: later in the paragraph the article refers to changes in the management body, meaning that the DRSP is already authorised. Secondly, it is in line with the supervision of TRs and given the fact that DRSPs under ESMA supervision are already authorised it would create a double standard of enforcement. Article 27e 1(c) already provides for this possibilityInsertion of 5a and 5b to reflect that having access to an APA and to an ARM is a necessary condition for counterparties to fulfil MiFIR transparency obligations. Considering that the data reporting market is small, not very competitive and prone to consolidation, there is a risk for the establishment of an oligopoly. Subjecting access to APAs and ARMs to “FRAND” conditions is therefore necessariy, as it is already foreseen for TRs.

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

~~Amendment 79~~

~~Proposal for a regulation~~

3. CTPs shall have sound security mechanisms in place designed to guarantee the security of the means of transfer of market 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.

~~Article 1 – paragraph 16~~

3a. CTPs shall publish a list of EEA International Securities Identification Number (ISIN) for all financial instruments that are covered by each CTP’s mandate in accordance with this Regulation.

~~Regulation (EU) No 600/2014~~

Each CTP shall offer free access to this list, and shall ensure that it is regularly reviewed and updated, to offer a comprehensive view of all the financial instruments covered by the consolidated tape

~~Article 27h – paragraph 1 – point c~~

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.’;

~~Text proposed by the Commission~~

(17) the following Article 27ha is inserted:

~~Amendment~~

‘Article 27ha Reporting obligations for consolidated tape providers

(c) in the case of market data concerning shares, redistribute part of their revenues for the purposes of covering the cost related to mandatory contribution and of ensuring a fair level of participation for regulated markets, and in particular smaller regulated markets, in the revenue generated by the consolidated tape, in accordance with Article 27da(4);

1. CTPs shall, at the end of each quarter, publish on their website, which shall be accessible for free, performance statistics and incident reports relating to data quality and systems.

(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, in accordance with Article 27da(4). The level of revenue redistributed to each market data contributor shall be proportional to the contribution to the price formation process of the data provided to the CTP by that market data contributor. Revenue generated from the pre-trade and post-trade consolidated data streams shall be redistributed exclusively to the contributors to a given data stream;

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

~~Or. en~~

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

~~Justification~~

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.’;

Aligning provision with contribution mechanism detailed in Art. 27da(4), and ensuring that pre-trade transparent data are assigned a higher value in the revenue redistribution mechanism, to better reflect the (higher) value of their contribution to the price formation process. This should lead to proportionally redistributing more revenues to lit venues. Contrary to the COM proposal however, the redistribution mechanism should only cover the costs faced by market data contributors.

3. CTPs shall keep and preserve records relating to their business for a period of no less than five years. Information concerning the first two years shall be kept in an easily accessible place, and the CTP shall promptly provide ESMA with such records upon request.’;

~~Amendment 80~~

~~Proposal for a regulation~~

~~Article 1 – paragraph 16~~

~~Regulation (EU) No 600/2014~~

~~Article 27h – paragraph 1 – point c a (new)~~

~~Text proposed by the Commission~~

~~Amendment~~

~~(ca) in case of market data concerning asset classes other than shares and ETFs, be allowed to redistribute part of the revenue to reward the quality and timeliness of data contributions;~~

~~Or. en~~

~~Justification~~

Introducing the possibility - on a non-mandatory basis - for CTPs in non-equities to redistribute part of their revenues to create a ‘virtuous’ mechanism in relation to the market data they receive. This, together with amendments related to transaction reporting, SI regime and data quality, is expected to contribute to improvements in the non-equity space, where the data are reportedly opaque and difficult to navigate.

~~Amendment 81~~

~~Proposal for a regulation~~

~~Article 1 – paragraph 16~~

~~Regulation (EU) No 600/2014~~

~~Article 27h – paragraph 1– point e~~

~~Text proposed by the Commission~~

~~Amendment~~

~~(e) ensure that the publication of the core market data complies with the applicable waivers and deferrals in Articles 4, 7, 11, 14, 20 and 21;~~

~~deleted~~

~~Or. en~~

~~Justification~~

The responsibility to apply waivers and deferrals should not be given to the CTP, but remain with trading venues, APAs and SIs according to the Articles of this Regulation . However, once the CTPs are fully operational, an expansion in the scope of their responsibility to include the application of waivers and deferrals could be considered.

~~Amendment 82~~

~~Proposal for a regulation~~

~~Article 1 – paragraph 16~~

~~Regulation (EU) No 600/2014~~

~~Article 27h – paragraph 1 – point f a (new)~~

~~Text proposed by the Commission~~

~~Amendment~~

~~(fa) 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.~~

~~Or. en~~

~~Justification~~

~~Requirement added to ensure consistency with the analogous APA requirement.~~

~~Amendment 83~~

~~Proposal for a regulation~~

~~Article 1 – paragraph 16~~

~~Regulation (EU) No 600/2014~~

~~Article 27h – paragraph 1 – subparagraph 2~~

~~Text proposed by the Commission~~

~~Amendment~~

For the purpose of establishing the participation in point (c), the revenue of the CTP shall be allocated among regulated markets according to a formula that reflects the proportion of pre-trade transparent liquidity in shares displayed by a regulated market relative to the average daily turnover in these shares in the Union.

For the purpose of establishing the revenue redistribution in point (c) of this paragraph, smaller regulated markets opting in to the mandatory contribution of market data to the CTP, in accordance with Article 22a(2b), shall be allocated a higher share of the revenue of the CTP, according to a formula that reflects the proportion of pre-trade transparent liquidity in shares displayed by that regulated market relative to the average daily turnover in these shares in the Union.

~~Or. en~~

~~Justification~~

Share of revenue redistributed to small regulated markets that decide to opt-in the CT should be higher than that allocated to other market data contributors (i.e. should not only be covering the costs for producing and ‘sending’ the market data, but also a little extra). The goal of this provision is to create an incentive for smaller regulated markets to be included in the CT. Smaller regulated markets would benefit from an inclusion in the CT, i.e. increase in their relative market share, overall attractiveness for investor, bigger flow of capitals - in line with the CMU objectives.

~~Amendment 84~~

~~Proposal for a regulation~~

~~Article 1 – paragraph 16~~

~~Regulation (EU) No 600/2014~~

~~Article 27h – paragraph 4~~

~~Text proposed by the Commission~~

~~Amendment~~

4. After 12 months of full operation of the CTP for shares, ESMA shall provide the Commission with a motivated opinion on the effectiveness and fairness of the level of participation of regulated markets 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.

4. After 24 months of full operation of the CTP for shares and ETF, ESMA shall provide the Commission with a motivated opinion on the effectiveness and fairness of the level of participation of smaller regulated markets that decided to opt in the mandatory contribution of market data, in accordance with Article 22a(2b), in the revenues generated by the CTP as set out in accordance with the second subparagraph of paragraph 1 of this Article. 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.

~~Or. en~~

~~Justification~~

The CT should be operation for more than a year in porder for ESMA to be able to provide a first reliable assessment of the marekt impact of the CT. ESMA shoud in partocular assess whether the revenue redistribution scheme has proved effective in pulling smaller regulated markets towards the CT and whether for those that opted-in there were tanhible benefits. Sghould it be demonstrated that the overall effect of the inclusion of smaller regulated markets were positive, the COM may want to consider removing the exemptions provided under Article 22b(2ab)

~~Amendment 85~~

~~Proposal for a regulation~~

~~Article 1 – paragraph 17 a (new)~~

~~Regulation (EU) No 600/2014~~

~~Article 27i – paragraphs 4a and 4b (new)~~

~~Text proposed by the Commission~~

~~Amendment~~

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

'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 ~~related~~associated towith 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. 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 years shall be kept in an easily accessible place and ARM shall provide such records to ESMA without delay upon request.’;

~~Or. en~~

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

~~Justification~~

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

~~FRAND and record keeping requirements for ARMs - in line with previous amendments on 27f~~

▌Transactions in OTC 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:’;

~~Amendment 86~~

(b) the following paragraph 2a is inserted:

~~Proposal for a regulation~~

'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.';

~~Article 1 – paragraph 19 – introductory part~~

~~Regulation (EU) No 600/2014~~

~~Article 32~~

~~Text proposed by the Commission~~

~~Amendment~~

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

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

~~Or. en~~

‘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.

~~Amendment 87~~

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.

~~Proposal for a regulation~~

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.

~~Article 1 – paragraph 19~~

~~Regulation (EU) No 600/2014~~

~~Article 32 – paragraph 7 a (new)~~

~~Text proposed by the Commission~~

~~Amendment~~

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 10. It 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.~~

~~Or. en~~

~~Justification~~

Adding a stand-alone suspension option for the DTO, i.e. independent of a suspension of the clearing obligation, in order for ESMA to have the necessary tool at hand in scenarios where it may be necessary to suspend the DTO but not the clearing obligation.This mechanism would allow to suspend, independently from the CO, the DTO for certain or all derivatives and based on criteria which would be more flexible than what currently feature in Article 32a. This proposal was strongly supported by market stakeholders.

~~Amendment 88~~

~~Proposal for a regulation~~

~~Article 1 – paragraph 19~~

~~Regulation (EU) No 600/2014~~

~~Article 32 – paragraph 8~~

~~Text proposed by the Commission~~

~~Amendment~~

~~8. The request referred to in paragraph 7 shall not be made public.~~

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

~~Or. en~~

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:

~~Amendment 89~~

(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;

~~Proposal for a regulation~~

(b) reject the requested suspension.

~~Article 1 – paragraph 19~~

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.’;

~~Regulation (EU) No 600/2014~~

(20) the following Article 32a is inserted:

~~Article 32 – paragraph 9~~

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

~~Text proposed by the Commission~~

1. 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 investment firms 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 an investment firm within its jurisdiction:

~~Amendment~~

(a) regularly receives requests for a quote for the derivatives subject to the derivatives trading obligation;

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

(b) from a non-EEA counterpart which has no active membership on a EU trading venue that offers trading in the derivative subject to the trading obligation; and

9. After having received the request 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:

~~Or. en~~

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:

~~Amendment 90~~

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

~~Proposal for a regulation~~

(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;

~~Article 1 – paragraph 20~~

~~Regulation (EU) No 600/2014~~

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

~~Article 32a (new) – title~~

2. When assessing whether to suspend the trading obligation in accordance with paragraphs 1 and 1a, 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.

~~Text proposed by the Commission~~

The Commission shall also contact the competent authorities of 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.

~~Amendment~~

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.

~~Article 32a~~

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

~~Article 32a~~

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

~~Stand-alone suspension of the trading obligation~~

~~Suspension of the trading obligation~~

~~Or. en~~

~~Amendment 91~~

~~Proposal for a regulation~~

~~Article 1 – paragraph 20~~

~~Regulation (EU) No 600/2014~~

~~Article 32a – paragraph 1 – point c a (new)~~

~~Text proposed by the Commission~~

~~Amendment~~

(ca) regularly trades derivatives subject to the derivatives trading obligation with non-EEA market makers which have no active membership on a Union-based organised trading facility that offers trading between investment firms that act as market makers in the derivative subject to the trading obligation.

~~Or. en~~

~~Justification~~

The COM proposal addresses the impact of the dealer-to-customer market by allowing for the temporary suspension when receiving client quotes from counterparties with no active membership on an EU trading venue. However, this solution does not address the dealer-to-dealer market for CDS in Europe. Introducing the possibility of suspensions for dealer-to-dealer platforms ensures that EU firms can easily use EU clearing services on the CDS markets, directly supporting the EU agenda to support the competitiveness of EU CCPs and clearing in the EU.

~~Amendment 92~~

~~Proposal for a regulation~~

~~Article 1 – paragraph 20~~

~~Regulation (EU) No 600/2014~~

~~Article 32a – paragraph 2~~

~~Text proposed by the Commission~~

~~Amendment~~

2. When assessing whether to suspend the trading obligation in accordance with paragraph 1, the Commission 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.

2. When assessing whether to suspend the derivatives trading obligation in accordance with paragraph 1(a) to (c) of this Article, the Commission 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.

When assessing whether to suspend the derivatives trading obligation in accordance with paragraph 1(d) of this Article, the Commission shall ensure that investment firms benefitting from the suspension clear these derivatives in a central counterparty authorised in accordance with Regulation (EU) 2012/648.

The Commission shall also contact 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 or States. Member States that did not file a request pursuant to paragraph 1 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 of States are added to the implementing act. The competent authority of the Member State or States making that request shall indicate and demonstrate why it considers that the conditions for a suspension are also met.

~~Or. en~~

~~Justification~~

Ensuring alignment with the clearing obligation and taking into account the wish expressed by several market participants to allow for a European mechanism ensuring that, once a MS requests a suspension of the DTO, all EU firms in a similar situation can also benefit from the exemption. The proposed amendment will avoid introducing unequal treatment between investment firms affected by a potential targeted suspension of the DTO while maintaining a thorough review process by relevant public authorities.

~~Amendment 93~~

~~Proposal for a regulation~~

~~Article 1 – paragraph 20~~

~~Regulation (EU) No 600/2014~~

~~Article 32a – paragraph 5~~

~~Text proposed by the Commission~~

~~Amendment~~

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

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

~~Or. en~~

(21) Article 35 is amended as follows:

~~Amendment 94~~

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

~~Proposal for a regulation~~

‘1. 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.

~~Article 1 – paragraph 21 – point b a (new)~~

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

~~Regulation (EU) 600/2014~~

The CCP shall in particular ensure that a trading venue has the right to non-discriminatory treatment of contracts traded on that trading venue in terms of:’;

~~Article 35 – paragraph 4~~

(b) paragraph 3 is replaced by the following:

~~Present text~~

‘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). 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.’;

~~Amendment~~

(ba) paragraph 4 is replaced by the following:

~~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:~~

‘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.

~~(a) would not require an interoperability arrangement, in the case of derivatives that are not OTC derivatives pursuant to Article 2(7) of Regulation (EU) No 648/2012; or~~

If a competent authority refuses access, it shall issue its decision within two months following receipt of the request referred to in paragraph 2 and provide full reasons to the other competent authority, the CCP and the trading venue including the evidence on which the decision is based.’;

~~(b) would not threaten the smooth and orderly functioning of the markets, in particular due to liquidity fragmentation, or would not adversely affect systemic risk.~~

(22) Article 36 is amended as follows:

Nothing in point (a) of the first subparagraph shall prevent access being granted where the request referred to in paragraph 2 requires interoperability and the trading venue and all CCPs party to the proposed interoperability arrangement have consented to the arrangement and the risks to which the incumbent CCP is exposed to arising from inter-CCP positions are collateralised at a third party.

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

Where the need for an interoperability arrangement is the reason or is part of the reason for denying a request, the trading venue will advise the CCP and inform ESMA which other CCPs have access to the trading venue and ESMA will publish that information so that investment firms may choose to exercise their rights under Article 37 of Directive 2014/65/EU in respect of those CCPs in order to facilitate alternative access arrangements.

‘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 by that Regulation that wishes to clear transactions in financial instruments that are concluded on that trading venue. That requirement shall not apply to:

If a competent authority refuses access it shall issue its decision within two months following receipt of the request referred to in paragraph 2 and provide full reasons to the other competent authority, the CCP and the trading venue including the evidence on which the decision is based.

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

(b) exchange-traded derivatives.’;

~~Or. en~~

(b) paragraph 3 is replaced by the following:

~~(https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A02014R0600-20220101)~~

‘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.’;

~~Justification~~

Deleted parts of paragraph 4 since ETDs would no longer be covered and the provisions would then no longer be relevant. Also outlining a more explicit process for granting access by NCAs. Currently, the absence of a refusal of access is used as a basis for granting access, but this is rather implicit and created quite a lot of uncertainty.

~~Amendment 95~~

~~Proposal for a regulation~~

~~Article 1 – paragraph 22 – point b a (new)~~

~~Regulation (EU) No 600/2014~~

~~Article 36 – paragraph 4~~

~~Present text~~

~~Amendment~~

(ba) paragraph 4 is replaced by the following:

4.‘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:~~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.

‘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 the trading venue has put in place adequate mechanisms to prevent such fragmentation, or would not adversely affect systemic risk.

~~(a) would not require an interoperability arrangement, in the case of derivatives that are not OTC derivatives pursuant to Article 2(7) of Regulation (EU) No 648/2012; or~~

(b) would not threaten the smooth and orderly functioning of the markets, in particular due to liquidity fragmentation and the trading venue has put in place adequate mechanisms to prevent such fragmentation, or would not adversely affect systemic risk.

If a competent authority denies access it shall issue its decision within two months following receipt of the request referred to in paragraph 2 and provide full reasons to the other competent authority, the trading venue and the CCP including the evidence on which its decision is based.

~~Or. en~~

~~(https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A02014R0600-20220101)~~

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

~~Justification~~

‘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.

~~Same as previous amendment.~~

A CCP established in a third country may request access to a trading venue in the Union subject to that CCP being recognised under Article 25 of Regulation (EU) No 648/2012.

~~Amendment 96~~

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.’;

~~Proposal for a regulation~~

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

~~Article 1 – paragraph 24~~

‘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 or 26, or Title IVa, it shall take one or more of the following actions:’;

~~Regulation (EU) No 600/2014~~

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

~~Article 38g – paragraph 1 – introductory part~~

‘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 or 26, or in Title IVa, it shall adopt a decision imposing a fine in accordance with paragraph 2 of this Article.’;

~~Text proposed by the Commission~~

(26) the following Article 39a is inserted:

~~Amendment~~

‘Article 39a Ban on payment for forwarding client orders for execution

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 22a, Article 22b, or Title IVa, it shall take one or more of the following actions:

Investment firms acting on behalf of clients shall not receive any fee or commission or non-monetary benefits from any third party for forwarding client orders to any third party for their execution.

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, 22b or 26, or Title IVa, it shall take one or more of the following actions:

The first subparagraph shall not apply to fees, commissions or non-monetary benefits related to the forwarding of professional clients’ orders for execution, where permitted under the approved and public tariff structure of a regulated market or MTF.’;

~~Or. en~~

(27) Article 50 is amended as follows:

~~Justification~~

(a) paragraph 2 is replaced by the following:

The reference to Title IVa only allows sanctioning violations of DRSP’s organisational requirements, and leaves outside some other provisions, such as Articles 20, 21 and 22 setting forth the APA publication and reporting requirements.Amendment includes reference to any of the requirements laid down in this regulation.It should be considered in the negotiations that the lack of an explicit definition of infringements may expose ESMA to legal challenges when imposing sanctions. For this reason, the insertion of a lost of infringements may be warranted.

‘2. The power to adopt delegated acts as referred to in the following provisions shall be conferred for an indeterminate period from 2 July 2014: Article 1(9), Article 2(2) and (3), 5(9a), 13(2), 15(5), 17(3), Article 19(2) and (3), and Articles 26(1a), 27(4), ▌27g(7), 27h(4), 31(4), 38k(10), 38n(3), 40(8), 41(8), 42(7), 45(10) and 52(10).’;

~~Amendment 97~~

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

~~Proposal for a regulation~~

‘The delegation of power referred to in the following provisions may be revoked at any time by the European Parliament or by the Council: Article 1(9), Article 2(2) and (3), 5(9a), Articles 13(2), 15(5), 17(3), Article 19(2) and (3), and Articles 26(1a), 27(4), ▌27g(7), 27h(4), 31(4), 38k(10), 38n(3), 40(8), 41(8), 42(7), 45(10) and 52(10).”;

~~Article 1 – paragraph 25~~

~~Regulation (EU) No 600/2014~~

‘A delegated act adopted pursuant to Article 1(9), Article 2(2) and (3), 5(9a), Articles 13(2), 15(5), 17(3), Article 19(2) and (3), and Articles 26(1a), 27(4), ▌27g(7), 27h(4), 31(4), 38k(10), 38n(3), 40(8), 41(8), 42(7), 45(10) and 52(10) 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.”;

~~Article 38h – paragraph 1 – subparagraph 1~~

(28) Article 52 is amended as follows:

~~Text proposed by the Commission~~

(a) paragraphs 11 and 12 are replaced by the following:

~~Amendment~~

‘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:

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 22a, Article 22b, or in Title IVa, it shall adopt a decision imposing a fine in accordance with paragraph 2 of this Article.

(a) the asset classes covered by a consolidated tape;

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, 22b or 26, or in Title IVa, it shall adopt a decision imposing a fine in accordance with paragraph 2 of this Article.

(b) the timeliness and delivery quality of market data consolidation;

~~Or. en~~

~~Justification~~

(d) the number of subscribers to consolidated market data per asset class;

~~Same as previous amendment.~~

(e) the effect of market data consolidation on remedying information asymmetries between various capital market participants;

~~Amendment 98~~

(f) the appropriateness and functioning of the participation scheme for market data contributions;

~~Proposal for a regulation~~

(g) the effects of the consolidated market data on investments in SMEs.

~~Article 1 – paragraph 26~~

(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]

~~Regulation (EU) No 600/2014~~

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▌’;

~~Article 39a – title~~

(b) paragraphs 13, 14 and 15 are deleted;

~~Text proposed by the Commission~~

~~Amendment~~

‘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.

~~Article 39a~~

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.’

~~Article 39a~~

(29) in Article 54, paragraph 2 is deleted.

~~Ban on payment for forwarding client orders for execution~~

Article 2 Entry into force and application

~~Rules on execution and forwarding of retail client orders~~

This Regulation shall enter into force and apply on the twentieth day following that of its publication in the Official Journal of the European Union.

~~Or. en~~

This Regulation shall be binding in its entirety and directly applicable in all Member States.

~~Amendment 99~~

Done at Brussels,

~~Proposal for a regulation~~

For the European Parliament For the Council

~~Article 1 – paragraph 26~~

The President The President

~~Regulation (EU) No 600/2014~~

PROCEDURE – COMMITTEE RESPONSIBLE

~~Article 39a – paragraph 1~~

Title

~~Text proposed by the Commission~~

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

~~Amendment~~

References

-1. Investment firms executing orders on behalf of a retail client shall take all necessary steps to obtain the best possible price for their clients, net of costs relating to execution, which shall include all expenses directly related to the execution of the order, including execution venue fees, clearing and settlement fees and any other fees paid to third parties involved in the execution of the order.

COM(2021)0727 – C9-0440/2021 – 2021/0385(COD)

1. Investment firms acting on behalf of clients shall not receive any fee or commission or non-monetary benefits from any third party for forwarding client orders to such third party for their execution.;

Date submitted to Parliament

1. Investment firms acting on behalf of clients shall not receive any fee or commission or non-monetary benefits from any third party for forwarding client orders to any third party for their execution.

25.11.2021

1a. The Commission shall adopt a delegated act in accordance with Article 50 by ... [12 months after the date of entry into force of this amending Regulation] to specify the market practices falling under the provision of the first subparagraph of this Article. The Commission shall regularly update that delegated act to account for the development of new market practices.

Committee responsible

~~Or. en~~

Date announced in plenary

~~Justification~~

ECON

The discussions around PFOF stem out of largely divergent interpretation of best execution rues, at the expense of end-investors, particularly retail ones, and a level playing field across companies in the EU. Moving the best-execution requirements for retail clients to MiFIR and formulating them clearly, i.e. price minus costs, together with a ban on PFOF, would strengthen investor protection, redirect retail trading to lit venues and align the Union with other major jurisdictions which ban or are considering to ban PFOF.

27.1.2022

~~Amendment 100~~

Committees asked for opinions

~~Proposal for a regulation~~

Date announced in plenary

~~Article 1 – paragraph 28 – point a~~

ITRE

~~Regulation (EU) No 600/2014~~

27.1.2022

~~Article 52 – paragraph 12~~

JURI

~~Text proposed by the Commission~~

27.1.2022

~~Amendment~~

Not delivering opinions

12. If by [OP insert date 1 year as of entry into force], no consolidated tape has emerged through the selection procedure organised by ESMA as referred to in Article 27da, the Commission shall review the framework and may accompany that review, where appropriate and after having consulted ESMA, with a legislative proposal setting out how ESMA should provide a consolidated tape.;

Date of decision

~~deleted~~

ITRE

~~Or. en~~

9.12.2021

~~Justification~~

JURI

Removal of the fall-back clause for ESMA. Should no CTP emerge, the COM should assess the reasons for the failure and address them in subsequent legislation.A different option could be for ESMA to become the CTP for a less-ambitious CT (for example, a 15 minutes post-trade tape for shares. In that case, however, consolidated data should be provided to market participants for free given their very limited value).

10.2.2022

~~Amendment 101~~

Rapporteurs

~~Proposal for a regulation~~

Date appointed

~~Article 1 – paragraph 28 – point b~~

Danuta Maria Hübner

~~Regulation (EU) No 600/2014~~

2.12.2021

~~Article 52 – paragraphs 13 and 14~~

Discussed in committee

~~Text proposed by the Commission~~

10.10.2022

~~Amendment~~

17.11.2022

~~(b) paragraph 14 is deleted;~~

Date adopted

~~(b) paragraphs 13 and 14 are deleted;~~

1.3.2023

~~Or. en~~

Result of final vote

~~EXPLANATORY STATEMENT~~

The rapporteur welcomes the Commission’s proposal for the review of the Markets in Financial Instruments Regulation and Directive (MiFIR/D). The review is timely: Europe needs effective, understandable and deliverable changes to the current framework to reduce the fragmentation and increase the size, competitiveness and attractiveness, of EU capital markets.

–:

Nonetheless, the rapporteur has identified certain areas for improvement. The amendments included in the report are informed by the desire to establish a regulatory framework conducive to an environment where all market participants benefit from trading. The amendments are guided by four main principles:

~~a. reducing fragmentation and cross-border barriers;~~

~~b. levelling the playing field, supporting a healthy degree of competition between different execution venues and methods;~~

~~c. allowing EU firms to be competitive internationally and more attractive for EU and third-countries investors;~~

~~d. encouraging retail participation and strengthening investor protection.~~

Members present for the final vote

It is clear that the changes require careful calibrations, in the spirit of an overall balanced approach and to the long-term benefit of EU market participants. The rapporteur has extensively engaged with market participants and national competent authorities, and has elaborated what is intended to be an ambitious yet balanced text, whose main changes classified into three areas: consolidated tape (CT), market structure and transparency, forwarding and execution of client orders.

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

~~Consolidated Tape~~

Substitutes present for the final vote

In its proposal, the Commission seeks to establish the conditions for the emergence of a CT in Europe across all asset classes. The rapporteur shares this objective: a CT displaying real-time prices for financial instruments across the Union is a fundamental tool to reduce fragmentation and improve the attractiveness of EU capital markets, and will provide great benefits to end investors.

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

The different CTs should be introduced in a phased approach - starting with bonds, then equities/ETFs and derivatives - and with no longer than six months between the initiation of the process for appointing the CTP in each asset class. To ensure an effective oversight of the tape by EU public authorities, ESMA should be granted sufficient time to run the selection and authorisation processes and address outstanding data issues. With respect to the latter, ESMA should consider industry’s prevailing standards and practices, to maximise the value of the CT for its users.

Substitutes under Rule 209(7) present for the final vote

The efficiency of the CT will be proportionate to the value it provides to its users - in this sense, it is essential that the equity tape contains real-time, pre-trade information, necessary to inform investors’ trading decisions. While the biggest players in the market will continue to seek access to the data stream that they currently use, a pre-trade CT in equity will be a great addition for players such as small and medium-size asset managers, or foreign investors seeking to access the EU markets. The CT should also be a tool for retail investors, and for them it should be intelligible easy to access and free or, at most, only requiring the payment of a symbolic amount.

Joachim Kuhs, Alessandro Panza, Roberts Zīle

The rapporteur recognises that the introduction of a CT for equities may impact regulated markets, which derive a significant share of their revenues from market data. Hence, the amendments introduce an exemption from mandatory contributions for markets that either (i) represent less than 1% of the total EU average daily trading volume, or (ii) do not contribute significantly to the fragmentation of EU markets as they mostly trade shares for which they are also the venue of primary admission.

Date tabled

Nonetheless, the rapporteur believes that the inclusion of all EU regulated markets in the CT would be beneficial for end investors, increase the attractiveness of the Union markets lead to an increase in trading volumes and visibility for smaller regulated markets - in line with the objectives of the Capital Markets Union action plan. The amendments therefore includes an opt-in option to the mandatory contribution scheme for those exemptible regulated markets. In those cases, a higher share of the CT revenues should be re-allocated to them.

2.3.2023

~~Market structure and transparency~~

FINAL VOTE BY ROLL CALL IN COMMITTEE RESPONSIBLE

~~a. Waivers, DVC and SIs quoting and execution rules~~

Key to symbols:

Today market participants must adhere to highly complex transparency rules, including the application of waivers, deferrals and the cap mechanism. The amendments seek to simplify these rules to the benefit of the EU market structure and to increase the competitiveness and attractiveness of EU markets as a whole.

There is also a recognition of the necessity to increase pre-trade transparency and thereby reinforce the price formation process, while ensuring that market quality, overall liquidity on EU trading venues and the domestic and international competitiveness and attractiveness of EU markets and firms are fostered.

As such, the rapporteur proposes a rebalancing of the rules governing capital markets by limiting the use of the waivers to pre-trade transparency obligations under Article 4 of MiFIR. The threshold for the use of those waivers should be determined by ESMA, and not be higher than twice the standard market size. This proposal introduces greater flexibility than the Commission’s proposed fixed threshold, allowing ESMA to factor in different elements when determining the threshold.

At the same time, the cap mechanism limiting dark trading under these waivers should be suspended. These caps were set arbitrarily and proved to be of limited utility, and their removal would reduce complexity and align the Union with international practices.

~~SIs quoting and executions rules are also reviewed, applying the same threshold as that under Article 4 of MiFIR.~~

The increase of the threshold for the use of waivers, the limits to SIs quoting and execution, and the suspension of the cap mechanism should achieve the dual objective of strengthening trading in lit venues while simplifying the rules, maintaining the competitiveness of EU firms and the number of trading choices available to end-investors. ESMA should be monitoring the impact of these changes on the functioning of markets, and intervene if the price formation process is undermined.

~~b. Non-equities deferrals~~

To simplify the current regime and ensure end-investors transparency, the rapporteur believes that the deferral regime for non-equities should be harmonised at Union level. 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. Evidence from other jurisdictions indicate that shorter deferrals are beneficial for end-investors and - for certain categories of transactions - do not affect negatively the liquidity available in the markets. At the same time, in recognition of the need for liquidity providers not to be exposed to undue risks, the amendments allow for the masking of the price and volume of very large transactions for a maximum of four weeks. The exact calibration of the various buckets for the deferrals should be left to ESMA, but the proposed approach should ensure greater transparency while accounting for the different necessities of market participants.

~~c. SIs definition and reporting requirements~~

The existing reporting regime for investment firms created uncertainty about who should report the trade and lead to duplicative reporting. Besides, the link between the reporting obligation and the status of a SI led to an inflated number of SIs in the Union, distorting the picture of market participants. The amendments thus seek to decouple the SI status and the reporting requirements, introducing the possibility for market participants to register as a ‘designated reporting entity’ (DRE).

ESMA should establish a register of all SIs and DREs, specifying their identity and the instruments or classes of instruments for which they are either an SI or a DRE. This would remove uncertainty and would reduce the regulatory burden for investment firms, particularly smaller ones. The rapporteur believes that under this approach, firms qualifying or opting in as SIs will only be those firms acting as liquidity providers, providing further clarity to the overall equity market structure.

~~d. DTO suspension~~

The rapporteur shares the Commission’s aim to enhance the Union’s clearing capacity by introducing a targeted suspension of the derivatives trading obligations (DTO). The COM proposal addresses the impact of the dealer-to-customer market by allowing for the temporary suspension when receiving client quotes from counterparties with no active membership on an EU trading venue. However, this solution does not address the dealer-to-dealer market for CDS in Europe. The amendment introduces the possibility for DTO suspensions in favour of dealer-to-dealer platforms that have established links to CCPs established in the Union, directly supporting the EU agenda to support the competitiveness of EU CCPs and clearing in the EU.

~~Forwarding and execution of client orders~~

The rapporteur believes that the problems identified by the Commission with the practices related to the so-called payments for order flows (PFOF) are symptomatic of a broader issue related to the best-execution regime. In particular, the way in which the best-execution requirements under Art. 27 of MiFID are worded has led to widely divergent supervisory interpretations, of which PFOF is the starkest example. This has led to increasing opportunities for regulatory arbitrage across borders, contrary to the objectives of a CMU.

In light of this, while the rapporteur maintains the initial proposal regarding PFOF, the amendments seek to implement changes to the best execution requirements with a view to ensure a harmonised approach to best execution, more transparency and a level playing field across Europe, to the benefits of end-investors. Art. 27 therefore mandates to develop clearer RTS for professional investors, while best-execution requirements for retail investors are brought under MiFIR, Art. 39a.

Finally, the transparency requirements should be effective and add value for market participants. Measures that in the name of transparency increase the regulatory burden faced by venues and investments firms without providing value to the investors should be removed - as it is the case for the so-called RTS 27 and 28 reports under Art. 27(3) and (6) of MiFID.