Commission Delegated Regulation (EU) 2017/567 of 18 May 2016 supplementing Regulation (EU) No 600/2014 of the European Parliament and of the Council with regard to definitions, transparency, portfolio compression and supervisory measures on product intervention and positions (Text with EEA relevance)

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Commission Delegated Regulation (EU) 2017/567, Article 5 is up to date with all changes known to be in force on or before 29 January 2026. There are changes that may be brought into force at a future date. Changes that have been made appear in the content and are referenced with annotations.

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Regulation revoked by 2023 c. 29 Sch. 1 Pt. 1 3

Article 5U.K.Assessment of liquidity of equity instruments by the competent authorities(Article 2(1)(17)(b) of Regulation (EU) No 600/2014)

1.[F1Subject to paragraph 1A,][F2the FCA] shall assess whether a share, depositary receipt, exchange traded fund or a certificate has a liquid market for the purposes of Article 2(1)(17)(b) of Regulation (EU) No 600/2014 in accordance with Articles 1 to 4 in each of the following scenarios:

(a)before the financial instrument is first traded on the trading venue, as specified in Articles 1(5), 2(4), 3(4) and 4(4);

(b)between the end of the first four weeks of trading and the end of the first six weeks of trading of the financial instrument. The assessment for this scenario shall be based on the free float as at the last trading day of the first four weeks of trading, the average daily number of transactions and the average daily turnover taking into consideration all transactions [F3executed in the relevant area] for that financial instrument during the first four weeks of trading;

(c)between the end of every calendar year and before 1 March of the following year for financial instruments traded on a trading venue before 1 December of the relevant calendar year. The assessment for this scenario shall be based on the free float as at the last trading day of the relevant calendar year, the average daily number of transactions and the average daily turnover taking into consideration all transactions [F4executed in the relevant area] for that financial instrument in that year;

(d)immediately after the moment where, following a corporate action, any previous assessment has changed.

[F5The FCA] shall ensure that the result of their assessment is published immediately upon completion of the assessment.

1A.[F6Subject to paragraph 1B, during the transitional period (within the meaning of Article [F714(6D)] of Regulation 600/2014/EU), paragraph 1 does not apply except as follows—

(a)the FCA must make and publish the assessment required by—

(i)point (a) of paragraph 1, where a share, depository certificate, exchange traded fund or a certificate (“a relevant instrument”) is traded on a UK trading venue for the first time after IP completion day;

(ii)point (d) of paragraph 1;

(b)the FCA may make (and if it does so must publish) the assessments required by point (b) or (c) of paragraph 1 if it has the data it needs to do so;

(c)subject to point (f), if no assessment has been carried out by the FCA under this paragraph, where any obligation in [F8assimilated] law relating to markets in financial instruments requires the determination of whether a particular relevant instrument has a liquid market, the most recent assessment made before IP completion day by a competent authority under this Article (as it was in force in the European Union before IP completion day) is to apply;

(d)if no assessment had been made by the FCA under this paragraph or by any competent authority before IP completion day in relation to a relevant instrument, that instrument is to be deemed not to have a liquid market for the purposes of article 2(1)(17)(b) of Regulation 600/2014/EU, unless an assessment has been made by the FCA under paragraph 1;

(e)the FCA may disregard the most recent assessment made in relation to a relevant instrument before IP completion day and direct that the instrument concerned is to be treated as not having a liquid market if—

(i)an assessment would be required under point (b) or point (c) of paragraph 1 but the FCA does not have the data to carry out such an assessment; and

(ii)it appears to the FCA that—

(aa)the liquidity of the financial instrument in UK trading venues has reduced since the relevant instrument was last assessed, and

(bb)the extent of the reduction in liquidity is so material that continuing to treat the relevant instrument as having a liquid market would have an adverse effect on price formation in that instrument;

(f)a direction given by the FCA under point (e) must be published as soon as possible.

1B.The FCA must make at least one assessment required by paragraph 1 no later than the date six weeks before the end of the transitional period in relation to every relevant instrument which is traded on a UK trading venue.

1C.If any assessment has been made and published by the FCA in accordance with paragraph 1A (including an assessment given by direction under point (e)) during the transitional period that assessment is to be used by the FCA, market operators and investment firms (including investment firms operating a trading venue)—

(a)from the date on which the assessment is published, in the case of an assessment in accordance with point (a)(ii) of paragraph 1A;

(b)from the date six weeks after the date on which that assessment was published in all other cases.]

2.[F9The FCA], market operators and investment firms including investment firms operating a trading venue shall use the information published in accordance with paragraph 1:

(a)for a period of six weeks commencing on the first day of trading of the financial instrument where the assessment is carried out pursuant to paragraph 1(a) of this Article;

(b)for a period commencing six weeks after the first day of trading of that financial instrument and ending on 31 March of the year of publication of the information in accordance with paragraph 1(c) of this Article where the assessment is carried out pursuant to paragraph 1(b) of this Article;

(c)for a period of one year commencing on 1 April following the date of publication where the assessment is carried out pursuant to paragraph 1(c) of this Article.

Where the information referred to in this paragraph is replaced by new information pursuant to paragraph 1(d) of this Article, [F9the FCA], market operators and investment firms including investment firms operating a trading venue shall use that new information for the purposes Article 2(1)(17)(b) of Regulation (EU) No 600/2014.

3.For the purposes of paragraph 1, trading venues shall submit to [F10the FCA] the information set out in the Annex within the following timeframes:

(a)for financial instruments which are admitted to trading for the first time, before the day on which the financial instrument is first traded;

(b)for financial instruments already admitted to trading, in all the following timeframes:

(i)

no later than three days after the end of the first four weeks of trading;

(ii)

after the end of every calendar year but no later than 3 January of the following year;

(iii)

immediately after the moment where, following a corporate action, the information previously submitted to the [F11FCA] has changed.

4.[F12For the purposes of this Article, the “relevant area” consists of the United Kingdom and those countries or regions specified by the FCA by direction.

5.The FCA may only give a direction under paragraph 4 specifying that a country or region is within the relevant area in relation to one or more financial instruments for the purposes of this Article if the FCA is able to obtain sufficient reliable trading data to enable it to assess the volume of trading in the financial instruments concerned in that country or region.

6.Article 50B of Regulation 600/2014/EU (“the Regulation”) applies to a direction given by the FCA for the purposes of this Article as it applies to a direction given by the FCA for the purposes of Article F13... F14... 14 of the Regulation.]

Textual Amendments

F1Words in Art. 5(1) inserted (31.12.2020) by The Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1403), regs. 1(3), 59(2)(a)(i) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F2Words in Art. 5(1) substituted (31.12.2020) by The Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1403), regs. 1(3), 59(2)(a)(ii) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F3Words in Art. 5(1)(b) substituted (31.12.2020) by The Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1403), regs. 1(3), 59(2)(a)(iii) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F4Words in Art. 5(1)(c) substituted (31.12.2020) by The Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1403), regs. 1(3), 59(2)(a)(iii) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F5Words in Art. 5(1) substituted (31.12.2020) by The Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1403), regs. 1(3), 59(2)(a)(iv) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F6Art. 5(1A)-(1C) inserted (31.12.2020) by The Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1403), regs. 1(3), 59(2)(b) (as amended by S.I. 2020/1301, regs. 1, 3, Sch. para. 12(w)) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)