Commission Delegated Regulation (EU) 2017/567Show full title

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)

THE EUROPEAN COMMISSION,

Having regard to the Treaty on the Functioning of the European Union,

Having regard to Regulation (EU) No 600/2014 of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Regulation (EU) No 648/2012(1), and in particular Articles 2(2), 13(2), 15(5), 17(3), Article 19(2) and (3), and Articles 31(4), 40(8), 41(8), 42(7) and 45(10) thereof,

Whereas:

(1) This Regulation further specifies the criteria for the determination of ‘liquid market’ in accordance with Article 2(1)(17)(b) of Regulation (EU) No 600/2014. For this purpose it is necessary to specify the criteria for free float, average daily number of transactions and average daily turnover specifically for shares, depositary receipts, exchange traded funds and certificates to take into account the specificities of each of these financial instruments. Rules specifying how liquidity calculations should be performed during the initial stage after the financial instrument is admitted to trading are required to ensure a consistent and uniform application across the Union.

(2) The provisions in this Regulation are closely linked, since they deal with definitions and specify requirements in relation to pre- and post-trade transparency by systematic internalisers and data publication by trading venues and systematic internalisers, on the one hand, and the European Securities Markets Authority (ESMA) product intervention and position management powers, on the other. To ensure coherence between those provisions which should enter into force at the same time, and in order to facilitate a comprehensive view for stakeholders and, in particular, those subject to the obligations, it is necessary to include these provisions in a single Regulation.

(3) In order to allow for a minimum of liquid equity instruments to exist in all parts of the Union, the competent authority of a Member State where fewer than five liquid financial instruments for each of shares, depositary receipts, exchange traded funds and certificates are traded, should be able to designate one or more additional liquid financial instruments, provided that the total number of financial instruments which are considered to have a liquid market does not exceed five in each of these categories of financial instruments.

(4) In order to ensure that market data is provided on a reasonable commercial basis in a uniform manner in the Union, this Regulation specifies the conditions that market operators and investment firms operating trading venues and systematic internalisers must fulfil. These conditions are based on the objective to ensure that the obligation to provide market data on a reasonable commercial basis is sufficiently clear to allow for an effective and uniform application whilst taking into account different operating models and costs structures of market operators and investment firms operating a trading venue and systematic internalisers.

(5) To ensure that fees for market data are set at a reasonable level, the fulfilment of the obligation to provide market data on a reasonable commercial basis requires that fees be based on a reasonable relationship to the cost of producing and disseminating that data. Therefore, without prejudice to the application of competition rules, data providers should determine their fees on the basis of their costs whilst being allowed to obtain a reasonable margin based on factors such as the operating profit margin, the return on costs, the return on operating assets and the return on capital. Where data providers incur joint costs for data provision and the provision of other services, costs of market data provision may include an appropriate share of joint costs arising from any other relevant service provided. Since specifying exact costs is complex, cost allocation and cost apportionment methodologies should be specified instead, leaving the specification of those costs to the discretion of market data providers whilst having regard to the objective of ensuring that fees for market data are set at a reasonable level in the Union.

(6) Market data should be provided on a non-discriminatory basis, which requires that the same price and other terms and conditions should be offered to all customers who are in the same category according to published objective criteria.

(7) To allow data users to obtain market data without having to buy other services, market data should be offered unbundled from other services. To avoid data users being charged more than once for the same market data when buying data sets from trading venues and from other market data distributors, market data should be offered on a per user basis unless doing so would be disproportionate considering the cost of such way of offering that data in respect of the scale and the scope of the market data provided by the market operator or the investment firm operating a trading venue or the systematic internaliser.

(8) In order to allow for data users and competent authorities to effectively assess whether market data is provided on a reasonable commercial basis, it is necessary that the essential conditions for its provision are disclosed to the public. Data providers should therefore disclose information about their fees and the content of the market data, as well as the cost accounting methodologies used to determine their costs without having to disclose their actual costs.

(9) This Regulation further specifies the conditions which systematic internalisers must fulfil to comply with the obligation to make quotes public on a regular and continuous basis during normal trading hours and easily accessible to other market participants to ensure that market participants wishing to access the quotes may effectively access them.

(10) Where systematic internalisers publish quotes through more than one means of publication they should provide their quotes simultaneously through each arrangement to ensure that the quotes published are consistent and that market participants may access the information at the same time. Where systematic internalisers make quotes public through the arrangements of a regulated market or a Multilateral Trading Facility (MTF) or through a data reporting services provider they should disclose their identity in the quote in order to enable market participants to direct their orders to it.

(11) This Regulation further specifies various technical aspects of the scope of the transparency obligations of systematic internalisers in order to ensure a consistent and uniform application across the Union. It is necessary that the exception to systematic internalisers' obligation to make public their quotes on a regular and continuous basis be strictly limited to situations where the continued provision of firm prices to clients may be contrary to the prudent management of the risks the investment firm is exposed to in its capacity as systematic internalisers, having regard to other mechanisms which may provide additional safeguards against such risks.

(12) In order to ensure that the exception to systematic internalisers obligations to execute the orders at the quoted prices at the time of reception of the order in accordance with Article 15(2) of Regulation (EU) No 600/2014 is limited to transactions which by their nature do not contribute to price formation, this Regulation further specifies exhaustively the conditions for what constitutes transactions in several securities as part of one transaction and orders subject to conditions other than the current market prices.

(13) The criterion specifying that a price falls within a public range close to market conditions reflects the need to ensure that execution by systematic internalisers contribute to price formation whilst not impeding on the possibility for systematic internalisers to offer price improvement in justified cases.

(14) In order to ensure that customers have access to systematic internalisers quotes in a non-discriminatory way but at the same time ensuring a proper risk management which takes into account the nature, scale and complexity of the activities of individual firms, it is necessary to specify that the number or volume of orders from the same client should be regarded as considerably exceeding the norm where a systematic internaliser cannot execute those orders without exposing itself to undue risk, something which should be defined in advance as a part of the firm's risk management policy and be based on objective factors and be stated in writing and made available to customers or potential customers.

(15) Since liquidity providers and systematic internalisers both trade on own account and incur comparable levels of risks, it is appropriate to determine the size specific to the instrument in a uniform way for these categories. Therefore, the size specific to the instrument for the purposes of Article 18(6) of Regulation (EU) No 600/2014 should be the size specific to the instrument determined in accordance with Article 9(5)(d) of Regulation (EU) No 600/2014 and as further specified in regulatory technical standards in accordance with this provision.

(16) In order to specify the elements of portfolio compression, so as to delineate it from trading and clearing services, it is necessary to identify the process whereby derivatives are wholly or partially terminated and replaced by a new derivative, in particular the steps of the process, the content of the agreement and the legal documentation supporting the portfolio compression.

(17) To ensure that suitable transparency of portfolio compression performed by counterparties is achieved, it is necessary to specify the information which should be made public.

(18) It is necessary to specify certain aspects of the intervention powers of both the relevant competent authorities and, in exceptional cases, ESMA established and exercising its powers in accordance with Regulation (EU) No 1095/2010 of the European Parliament and of the Council(2) and the European Banking Authority (EBA) established and exercising its powers in accordance with Regulation (EU) No 1093/2010 of the European Parliament and of the Council(3) as regards significant investor protection concern or threat to the orderly functioning and integrity of financial markets or commodity markets or to the stability of the whole or part of the financial system of at least one Member State or respectively of the Union. The existence of a ‘threat’, one of the prerequisites of the intervention in the perspective of the orderly functioning and integrity of financial or commodity markets or stability of the financial system, would require the existence of a greater concern than a ‘significant concern’, which is the prerequisite of the intervention for investor protection.

(19) A list of criteria and factors to be taken into account by competent authorities, ESMA and EBA in determining when there is such a concern or threat should be established to ensure a consistent approach while permitting appropriate action to be taken where unforeseen adverse events or developments occur. The need to assess all criteria and factors that could be present in a specific factual situation should not prevent however the temporary intervention power from being used by competent authorities, ESMA and EBA where only one of the factors or criteria leads to such a concern or threat.

(20) It is necessary to specify the circumstances under which ESMA can use its position management powers in accordance with Regulation (EU) No 600/2014 in order to ensure a consistent approach while permitting appropriate action to be taken where unforeseen adverse events or developments occur.

(21) For reasons of consistency and in order to ensure the smooth functioning of the financial markets, it is necessary that the provisions of this Regulation and the provisions laid down in Regulation (EU) No 600/2014 apply from the same date. However, to ensure that the new transparency regulatory regime can operate effectively, certain provisions of this Regulation should apply from the date of its entry into force,

HAS ADOPTED THIS REGULATION:

Modifications etc. (not altering text)

C1 Regulation: power to modify conferred (11.7.2023) by Financial Services and Markets Act 2023 (c. 29), ss. 3, 86(3), Sch. 1 Pt. 13; S.I. 2023/779, reg. 2(d)

[F1 Article A1 U.K. Interpretation

For the purposes of this Regulation—

(a) any reference to a sourcebook is to a sourcebook in the Handbook of Rules and Guidance published by the Financial Conduct Authority containing rules made by that Authority under FSMA as the sourcebook has effect on IP completion day;

(b) any reference to the PRA rulebook is to the rulebook published by the Prudential Regulation Authority containing rules made by that Authority under FSMA as the rulebook has effect on IP completion day.

(c) any expression which is used in Regulation (EU) No 600/2014 (as amended by the Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2018) has the same meaning as in that Regulation;

(d) any expression which is used in the Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017 has the same meaning as in those Regulations.]

Textual Amendments

F1 Art. A1 inserted (31.12.2020) by The Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1403), regs. 1(3), 58 (as amended by S.I. 2020/1301, regs. 1, 3, Sch. para. 12(v)) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

CHAPTER I U.K. DETERMINING LIQUID MARKETS FOR EQUITY INSTRUMENTS

Article 1 U.K. Determining liquid markets for shares(Article 2(1)(17)(b) of Regulation (EU) No 600/2014)

1. For the purposes of Article 2(1)(17)(b) of Regulation (EU) No 600/2014, a share that is traded daily shall be considered to have a liquid market where all of the following conditions are satisfied:

(a) the free float of the share is:

(i)

not less than EUR 100 million for shares admitted to trading on a regulated market;

(ii)

not less than EUR 200 million for shares that are only traded on MTFs;

(b) the average daily number of transactions in the share is not less than 250;

(c) the average daily turnover for the share is not less than EUR 1 million.

2. For the purposes of paragraph 1(a), the free float of a share shall be calculated by multiplying the number of outstanding shares by the price per share, excluding individual holdings in that share that exceed 5 % of the total voting rights of the issuer, unless those holdings are held by a collective investment undertaking or a pension fund. Voting rights shall be calculated by reference to the total number of shares to which voting rights are attached, regardless of whether the exercise of the voting right is suspended.

3. For the purposes of paragraph 1(a)(ii), where no actual information is available in accordance with paragraph 2, the free float of a share that is only traded on MTFs shall be calculated by multiplying the number of outstanding shares by the price per share.

4. For the purposes of paragraph 1(c), the daily turnover of a share shall be calculated by aggregating the results of multiplying, for each transaction executed during a trading day, the number of shares exchanged between the buyer and the seller by the price per share.

5. During the six-week period commencing on the first trading day following the first admission of a share to trading on a regulated market or an MTF, that share shall be considered to have a liquid market for the purposes of Article 2(1)(17)(b) of Regulation (EU) No 600/2014 where the sum obtained by multiplying the number of outstanding shares by the price at which the share stands at the start of the first trading day is estimated to be not less than EUR 200 million, and, where, according to estimated data for that period, the conditions set out in paragraph 1(b) and (c) are fulfilled.

6. Where fewer than five shares traded on [F2 UK trading venues] and first admitted to trading in [F3 the United Kingdom] are considered to have a liquid market in accordance with paragraph 1, [F4 the FCA] may designate one or more share first admitted to trading on those trading venues as share considered to have a liquid market, provided that the total number of shares first admitted to trading in [F3 the United Kingdom] and considered to have a liquid market does not exceed five.

Textual Amendments

F2 Words in Art. 1(6) substituted (31.12.2020) by The Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1403), regs. 1(3), 59(1)(a) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F3 Words in Art. 1(6) substituted (31.12.2020) by The Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1403), regs. 1(3), 59(1)(b) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F4 Words in Art. 1(6) substituted (31.12.2020) by The Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1403), regs. 1(3), 59(1)(c) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

Article 2 U.K. Determining liquid markets for depositary receipts(Article 2(1)(17)(b) of Regulation (EU) No 600/2014)

1. For the purposes of Article 2(1)(17)(b) of Regulation (EU) No 600/2014, a depositary receipt that is traded daily shall be considered to have a liquid market where all of the following conditions are satisfied:

(a) the free float is not less than EUR 100 million;

(b) the average daily number of transactions in the depositary receipt is not less than 250;

(c) the average daily turnover for the depositary receipt is not less than EUR 1 million.

2. For the purposes of paragraph 1(a), the free float of a depositary receipt shall be calculated by multiplying the number of outstanding units of the depositary receipt by the price per unit.

3. For the purposes of paragraph 1(c), the daily turnover of a depositary receipt shall be calculated by aggregating the results of multiplying, for each transaction executed during a trading day, the number of units of the depositary receipt exchanged between the buyer and the seller by the price per unit.

4. For the six-week period commencing on the first day of trading following the first admission of a depositary receipt to trading on a trading venue, that depositary receipt shall be considered to have a liquid market for the purposes of Article 2(1)(17)(b) of Regulation (EU) No 600/2014 where the estimated free float at the start of the first day of trading stands at not less than EUR 100 million and, where, according to estimated data for that period, the conditions set out in paragraph 1(b) and (c) are fulfilled.

5. Where fewer than five depositary receipts traded on [F5 UK trading venues] and first admitted to trading in [F6 the United Kingdom] are considered to have a liquid market in accordance with paragraph 1, [F7 the FCA] may designate one or more depositary receipt first admitted to trading on those trading venues as depositary receipt considered to have a liquid market, provided that the total number of depositary receipts first admitted to trading in [F6 the United Kingdom] and considered to have a liquid market does not exceed five.

Textual Amendments

F5 Words in Art. 2(5) substituted (31.12.2020) by The Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1403), regs. 1(3), 59(1)(a) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F6 Words in Art. 2(5) substituted (31.12.2020) by The Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1403), regs. 1(3), 59(1)(b) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F7 Words in Art. 2(5) substituted (31.12.2020) by The Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1403), regs. 1(3), 59(1)(c) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

Article 3 U.K. Determining liquid markets for exchange traded funds(Article 2(1)(17)(b) of Regulation (EU) No 600/2014)

1. For the purposes of Article 2(1)(17)(b) of Regulation (EU) No 600/2014, an exchange traded fund that is traded daily shall be considered to have a liquid market where all of the following conditions are satisfied:

(a) the free float is not less than 100 units;

(b) the average daily number of transactions in the exchange traded fund is not less than 10;

(c) the average daily turnover for the exchange traded fund is not less than EUR 500 000.

2. For the purposes of paragraph 1(a), the free float of an exchange traded fund shall be the number of units issued for trading.

3. For the purposes of paragraph 1(c), the daily turnover for the exchange traded fund shall be calculated by aggregating the results of multiplying, for each transaction executed during a trading day, the number of units of the exchange traded fund exchanged between the buyer and the seller by the price per unit.

4. During the six-week period commencing on the first trading day following the first admission of an exchange traded fund to trading on a trading venue, that exchange traded fund shall be considered to have a liquid market for the purposes of Article 2(1)(17)(b) of Regulation (EU) No 600/2014 where the estimated free float at the start of the first trading day stands at not less than 100 units and, where, according to estimated data for that period, the conditions set out in paragraph 1(b) and (c) are fulfilled.

5. Where fewer than five exchange traded funds traded on [F8 UK trading venues] and first admitted to trading in [F9 the United Kingdom] are considered to have a liquid market in accordance with paragraph 1, [F10 the FCA] may designate one or more exchange traded fund first admitted to trading on those trading venues as exchange traded fund considered to have a liquid market, provided that the total number of exchange traded funds first admitted to trading in [F9 the United Kingdom] and considered to have a liquid market does not exceed five.

Textual Amendments

F8 Words in Art. 3(5) substituted (31.12.2020) by The Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1403), regs. 1(3), 59(1)(a) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F9 Words in Art. 3(5) substituted (31.12.2020) by The Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1403), regs. 1(3), 59(1)(b) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F10 Words in Art. 3(5) substituted (31.12.2020) by The Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1403), regs. 1(3), 59(1)(c) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

Article 4 U.K. Determining liquid markets for certificates(Article 2(1)(17)(b) of Regulation (EU) No 600/2014)

1. For the purposes of Article 2(1)(17)(b) of Regulation (EU) No 600/2014, a certificate that is traded daily shall be considered to have a liquid market where all of the following conditions are satisfied:

(a) the free float is not less than EUR 1 million;

(b) the average daily number of transactions in the certificate is not less than 20;

(c) the average daily turnover for the certificate is not less than EUR 500 000.

2. For the purposes of paragraph 1(a), the free float of a certificate shall be the issuance size irrespective of the number of units issued.

3. For the purposes of paragraph 1(c), the daily turnover for the certificate shall be calculated by aggregating the results of multiplying, for each transaction executed during a trading day, the number of units of the certificate exchanged between the buyer and the seller by the price per unit.

4. During the six-week period commencing on the first trading day following the first admission of a certificate to trading on a trading venue, that certificate shall be considered to have a liquid market for the purposes of Article 2(1)(17)(b) of Regulation (EU) No 600/2014 where the estimated free float at the start of the first trading day stands at not less than EUR 1 million, and, where, according to estimated data for that period, the conditions set out in paragraph 1(b) and (c) are fulfilled.

5. Where fewer than five certificates traded on [F11 UK trading venues] and first admitted to trading in [F12 the United Kingdom] are considered to have a liquid market in accordance with paragraph 1, [F13 the FCA] may designate one or more certificate first admitted to trading on those trading venues as certificate considered to have a liquid market, provided that the total number of certificates first admitted to trading in [F12 the United Kingdom] and considered to have a liquid market does not exceed five.

Textual Amendments

F11 Words in Art. 4(5) substituted (31.12.2020) by The Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1403), regs. 1(3), 59(1)(a) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F12 Words in Art. 4(5) substituted (31.12.2020) by The Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1403), regs. 1(3), 59(1)(b) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F13 Words in Art. 4(5) substituted (31.12.2020) by The Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1403), regs. 1(3), 59(1)(c) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

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

1. [F14 Subject to paragraph 1A,][F15 the 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 [F16 executed 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 [F17 executed 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.

[F18 The FCA] shall ensure that the result of their assessment is published immediately upon completion of the assessment.

1A. [F19 Subject to paragraph 1B, during the transitional period (within the meaning of Article [F20 14(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 [F21 assimilated] 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. [F22 The 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, [F22 the 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 [F23 the 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 [F24 FCA] has changed.

4. [F25 For 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 F26 ... F27 ... 14 of the Regulation.]

Textual Amendments

F14 Words 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)

F15 Words 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)

F16 Words 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)

F17 Words 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)

F18 Words 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)

F19 Art. 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)

F20 Word in Art. 5(1A) substituted (1.1.2024) by The Financial Services and Markets Act 2023 (Consequential Amendments) Regulations 2023 (S.I. 2023/1410), regs. 1(2), 20(a)

F21 Word in Art. 5(1A)(c) substituted (27.2.2025) by The Retained EU Law (Revocation and Reform) Act 2023 (Consequential Amendments) Regulations 2025 (S.I. 2025/82), reg. 1(2), Sch. 9 para. 44

F22 Words in Art. 5(2) substituted (31.12.2020) by The Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1403), regs. 1(3), 59(2)(c) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F23 Words in Art. 5(3) substituted (31.12.2020) by The Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1403), regs. 1(3), 59(2)(d)(i) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F24 Word in Art. 5(3)(b)(iii) substituted (31.12.2020) by The Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1403), regs. 1(3), 59(2)(d)(ii) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F25 Art. 5(4)-(6) inserted (31.12.2020) by The Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1403), regs. 1(3), 59(2)(e) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F26 Word in Art. 5(6) omitted (1.1.2024) by virtue of The Financial Services and Markets Act 2023 (Consequential Amendments) Regulations 2023 (S.I. 2023/1410), regs. 1(2), 20(b)

F27 Words in Art. 5(6) omitted (1.12.2024) by virtue of The Financial Services and Markets Act 2023 (Consequential Amendments) Regulations 2024 (S.I. 2024/1115), regs. 2(1)(d), 5(2)

CHAPTER II U.K. DATA PROVISION OBLIGATIONS FOR TRADING VENUES AND SYSTEMATIC INTERNALISERS

F28 Article 6 U.K. Obligation to provide market data on a reasonable commercial basis(Article 13(1), 15(1) and 18(8) of Regulation (EU) No 600/2014)

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Textual Amendments

F28 Arts. 6-11 omitted (1.12.2024) by virtue of The Financial Services and Markets Act 2023 (Consequential Amendments) Regulations 2024 (S.I. 2024/1115), regs. 2(1)(d), 5(3)

F28 Article 7 U.K. Obligation to provide market data on the basis of cost(Article 13(1), 15(1) and 18(8) of Regulation (EU) No 600/2014)

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Textual Amendments

F28 Arts. 6-11 omitted (1.12.2024) by virtue of The Financial Services and Markets Act 2023 (Consequential Amendments) Regulations 2024 (S.I. 2024/1115), regs. 2(1)(d), 5(3)

F28 Article 8 U.K. Obligation to provide market data on a non-discriminatory basis(Article 13(1), 15(1) and 18(8) of Regulation (EU) No 600/2014)

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Textual Amendments

F28 Arts. 6-11 omitted (1.12.2024) by virtue of The Financial Services and Markets Act 2023 (Consequential Amendments) Regulations 2024 (S.I. 2024/1115), regs. 2(1)(d), 5(3)

F28 Article 9 U.K. Obligations in relation to per user fees(Article 13(1), 15(1) and 18(8) of Regulation (EU) No 600/2014)

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Textual Amendments

F28 Arts. 6-11 omitted (1.12.2024) by virtue of The Financial Services and Markets Act 2023 (Consequential Amendments) Regulations 2024 (S.I. 2024/1115), regs. 2(1)(d), 5(3)

F28 Article 10 U.K. Obligation to keep data unbundled and to disaggregate market data(Article 13(1), 15(1) and 18(8) of Regulation (EU) No 600/2014)

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Textual Amendments

F28 Arts. 6-11 omitted (1.12.2024) by virtue of The Financial Services and Markets Act 2023 (Consequential Amendments) Regulations 2024 (S.I. 2024/1115), regs. 2(1)(d), 5(3)

F28 Article 11 U.K. Transparency obligation(Article 13(1), 15(1) and 18(8) of Regulation (EU) No 600/2014)

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Textual Amendments

F28 Arts. 6-11 omitted (1.12.2024) by virtue of The Financial Services and Markets Act 2023 (Consequential Amendments) Regulations 2024 (S.I. 2024/1115), regs. 2(1)(d), 5(3)

CHAPTER III U.K. DATA PUBLICATION OBLIGATIONS FOR SYSTEMATIC INTERNALISERS

Article 12 U.K. Obligation for systematic internalisers to make quotes public on a regular and continuous basis during normal trading hours(Article 15(1) of Regulation (EU) No 600/2014)

For the purposes of Article 15(1) of Regulation (EU) No 600/2014, a systematic internaliser shall be considered to make public its quotes on a regular and continuous basis during normal trading hours only where the systematic internaliser makes the quotes available at all times during the hours which the systematic internaliser has established and published in advance as its normal trading hours.

Article 13 U.K. Obligation for systematic internalisers to make quotes easily accessible(Article 15(1) of Regulation (EU) No 600/2014)

1. Systematic internalisers shall specify and update on their website's homepage which of the publication arrangements set out in Article 17(3)(a) of Regulation (EU) No 600/2014 they use to make public their quotes.

2. Where systematic internalisers make their quotes public through the arrangements of a trading venue or an APA, the systematic internaliser shall disclose their identity in the quote.

3. Where systematic internalisers employ more than one arrangement to make public their quotes, publication of the quotes shall occur simultaneously.

4. Systematic internalisers shall make public their quotes in a machine-readable format. Quotes shall be considered to be published in a machine-readable format where the publication meets the criteria set out in Commission Delegated Regulation (EU) 2017/571(4).

5. Where systematic internalisers make public their quotes through proprietary arrangements only, the quotes shall also be made public in a human-readable format. Quotes shall be considered to be published in a human-readable format where:

(a) the content of the quote is in a format which can be understood by the average reader;

(b) the quote is published on the systematic internaliser's website and the website's homepage contains clear instructions for accessing the quote.

6. Quotes shall be published using the standards and specifications set out in Commission Delegated Regulation (EU) 2017/587(5).

Article 14 U.K. Execution of orders by systematic internalisers(Article 15(1), 15(2) and 15(3) of Regulation (EU) No 600/2014)

1. For the purposes of Article 15(1) of Regulation (EU) No 600/2014, exceptional market conditions are considered to exist where to impose on a systematic internaliser an obligation to provide firm quotes to clients would be contrary to prudent risk management and, in particular, where:

(a) the trading venue where the financial instrument was first admitted to trading or the most relevant market in terms of liquidity halts trading for that financial instrument in accordance with [F29 paragraph 3B of the Schedule to the Financial Services and Markets Act 2000 (Recognition Requirements for Investment Exchanges, Clearing Houses and Central Securities Depositories) Regulations 2001 or rules 5.3A.5 to 5.3A.8 or 5A.5.5 to 5A.5.8 of the Market Conduct sourcebook];

(b) the trading venue where the financial instrument was first admitted to trading or the most relevant market in terms of liquidity allows market making obligations to be suspended;

(c) in the case of an exchange traded fund, a reliable market price is not available for a significant number of instruments underlying the ETF or the index;

(d) [F30 the FCA] prohibits short sales in that financial instrument according to Article 20 of Regulation (EU) No 236/2012 of the European Parliament and of the Council(6).

2. For the purposes of Article 15(1) of Regulation (EU) No 600/2014, a systematic internaliser may update its quotes at any time, provided at all times that the updated quotes are the consequence of, and consistent with, genuine intentions of the systematic internaliser to trade with its clients in a non-discriminatory manner.

3. For the purposes of Article 15(2) of Regulation (EU) No 600/2014, a price falls within a public range close to market conditions where the following conditions are fulfilled:

(a) the price is within the bid and offer quotes of the systematic internaliser;

(b) the quotes referred to in point (a) reflect prevailing market conditions for the relevant financial instrument in accordance with Article 14(7) of Regulation (EU) No 600/2014.

4. For the purposes of Article 15(3) of Regulation (EU) No 600/2014, execution in several securities shall be considered part of one transaction where the criteria laid down in Delegated Regulation (EU) 2017/587 are fulfilled.

5. For the purposes of Article 15(3) of Regulation (EU) No 600/2014, an order shall be considered subject to conditions other than the current market price where the criteria laid down in Delegated Regulation (EU) 2017/587 are fulfilled.

Textual Amendments

F29 Words in Art. 14(1)(a) substituted (31.12.2020) by The Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1403), regs. 1(3), 60(a) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F30 Words in Art. 14(1)(d) substituted (31.12.2020) by The Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1403), regs. 1(3), 60(b) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

Article 15 U.K. Orders considerably exceeding the norm(Article 17(2) of Regulation (EU) No 600/2014)

1. For the purposes of Article 17(2) of Regulation (EU) No 600/2014, the number or volume of orders shall be considered to considerably exceed the norm where a systematic internaliser cannot execute the number or volume of those orders without exposing itself to undue risk.

2. Investment firms acting as systematic internalisers shall determine in advance and in a manner that is objective and consistent with their risk management policy and procedures referred to in [F31 rules made by the Financial Conduct Authority under the Financial Services and Markets Act 2000,], when the number or volume of orders sought by clients is considered to expose the firm to undue risk.

3. For the purposes of paragraph 2, a systematic internaliser shall establish, maintain and implement as part of its risk management policy and procedures, a policy for identifying the number or volume of orders that it can execute without being exposed to undue risk, taking into account both the capital that the firm has available to cover the risk for that type of trade and the prevailing conditions in the market.

4. In accordance with Article 17(2) of Regulation (EU) No 600/2014, the policy referred to in paragraph 3 shall be non-discriminatory to clients.

Textual Amendments

F31 Words in Art. 15(2) substituted (23.10.2025) by The Markets in Financial Instruments (Miscellaneous Amendments) Regulations 2025 (S.I. 2025/1020), regs. 1(2), 16 (with reg. 17); S.I. 2025/1078, reg. 2(b) (with reg. 11)

F32 Article 16 U.K. Size specific to the instrument(Article 18(6) of Regulation (EU) No 600/2014)

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Textual Amendments

F32 Art. 16 omitted (1.12.2024) by virtue of The Financial Services and Markets Act 2023 (Consequential Amendments) Regulations 2024 (S.I. 2024/1115), regs. 2(1)(d), 5(4)

CHAPTER IV U.K. DERIVATIVES

F33 Article 17 U.K. Elements of Portfolio compression(Article 31(4) of Regulation (EU) No 600/2014)

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Textual Amendments

F33 Art. 17 omitted (30.6.2025) by virtue of The Financial Services and Markets Act 2023 (Consequential Amendments) Regulations 2024 (S.I. 2024/1115), regs. 2(2), 5(5)

F34 Article 18 U.K. Publication requirements for Portfolio compression(Article 31(4) of Regulation (EU) No 600/2014)

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Textual Amendments

F34 Art. 18 omitted (30.6.2025) by virtue of The Financial Services and Markets Act 2023 (Consequential Amendments) Regulations 2024 (S.I. 2024/1115), regs. 2(2), 5(5)

CHAPTER V U.K. SUPERVISORY MEASURES ON PRODUCT INTERVENTION AND POSITION MANAGEMENT

SECTION 1 U.K. Product intervention

F35 Article 19 U.K. Criteria and factors for the purposes of ESMA temporary product intervention powers(Article 40(2) of Regulation (EU) No 600/2014)

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Textual Amendments

F35 Art. 19 omitted (31.12.2020) by virtue of The Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1403), regs. 1(3), 61(1) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F36 Article 20 U.K. Criteria and factors for the purposes of EBA temporary product intervention powers(Article 41(2) of Regulation (EU) No 600/2014)

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Textual Amendments

F36 Art. 20 omitted (31.12.2020) by virtue of The Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1403), regs. 1(3), 61(1) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

Article 21 U.K. Criteria and factors to be taken into account by [F37 the FCA] for the purposes of product intervention powers(Article 42(2) of Regulation (EU) No 600/2014)

1. For the purposes of Article 42(2)(a) of Regulation (EU) No 600/2014, [F38 the FCA] shall assess the relevance of all factors and criteria listed in paragraph 2, and take into consideration all relevant factors and criteria in determining when the marketing, distribution or sale of certain financial instruments or structured deposits or financial instruments or structured deposits with certain specified features or a type of financial activity or practice creates a significant investor protection concern or a threat to the orderly functioning and integrity of financial markets or commodity markets or to the stability of the whole or part of the financial system within [F39 the United Kingdom].

For the purposes of the first subparagraph, [F38 the FCA] may determine the existence of a significant investor protection concern or a threat to the orderly functioning and integrity of financial markets or commodity markets or to the stability of the whole or part of the financial system within [F39 the United Kingdom] based on one or more of those factors and criteria.

2. The factors and criteria to be assessed by [F40 the FCA] to determine whether there is a significant investor protection concern or a threat to the orderly functioning and integrity of financial markets or commodity markets or to the stability of the whole or part of the financial system within [F41 the United Kingdom] shall include the following:

(a) the degree of complexity of the financial instrument or type of financial activity or practice in relation to the type of clients, as assessed in accordance with point (c), involved in the financial activity or financial practice, or to whom the financial instrument or structured deposit is marketed or sold, taking into account, in particular:

• (a) the type of the underlying or reference assets and the degree of transparency of the underlying or reference assets;

• the degree of transparency of costs and charges associated with the financial instrument, structured deposit, financial activity or financial practice, and, in particular, the lack of transparency resulting from multiple layers of costs and charges;

• the complexity of the performance calculation, taking into account whether the return is dependent on the performance of one or more underlying or reference assets which are in turn affected by other factors or whether the return depends not only on the values of the underlying or reference assets at the initial and maturity dates, but also on the values during the lifetime of the product;

• the nature and scale of any risks;

• whether the product or service is bundled with other products or services;

• the complexity of any terms and conditions;

(b) the size of potential detrimental consequences, considering in particular:

• (b) the notional value of the financial instrument or of an issuance of structured deposits;

• the number of clients, investors or market participants involved;

• the relative share of the product in investors' portfolios;

• the probability, scale and nature of any detriment, including the amount of loss potentially suffered;

• the anticipated duration of the detrimental consequences;

• the volume of the issuance;

• the number of intermediaries involved;

• the growth of the market or sales;

• the average amount invested by each client in the financial instrument or structured deposit; or

• the coverage level defined in [F42 Chapter 4 of the Depositor Protection Part of the PRA Rulebook], in the case of structured deposits;

(c) the type of clients involved in a financial activity or financial practice or to whom a financial instrument or structured deposit is marketed or sold, taking into account, in particular:

• (c) whether the client is a retail client, a professional client or an eligible counterparty;

• clients' skills and abilities, including the level of education, experience with similar financial instruments or structured deposits or selling practices;

• clients' economic situation, including their income, and wealth;

• clients' core financial objectives, including pension saving and home ownership financing;

• whether the product or service is being sold to clients outside the intended target market or where the target market has not been adequately identified; or

• the eligibility for coverage by a deposit guarantee scheme, in the case of structured deposits;

(d) the degree of transparency of the financial instrument, structured deposit or type of financial activity or practice, taking into account, in particular:

• (d) the type and transparency of the underlying;

• any hidden costs and charges;

• the use of techniques drawing clients' attention but not necessarily reflecting the suitability or overall quality of the product, the financial activity or the financial practice;

• the nature of risks and transparency of risks;

• the use of product names or terminology or other information that is misleading by implying a greater level of security or return than those which are actually possible or likely, or which imply product features that do not exist; or

• in case of structured deposits, whether the identity of deposit takers which might be responsible for the client's deposit, is disclosed;

(e) the particular features or components of the structured deposit, financial instrument, financial activity or financial practice, including any embedded leverage, taking into account, in particular:

• (e) the leverage inherent in the product;

• the leverage due to financing;

• the features of securities financing transactions; or

• the fact that the value of any underlying is no longer available or reliable;

(f) the existence and degree of disparity between the expected return or profit for investors and the risk of loss in relation to the financial instrument, structured deposit, financial activity or financial practice, taking into account, in particular:

• (f) the structuring costs of such financial instrument, structured deposit, financial activity or financial practice and other costs;

• the disparity in relation to the issuer's risk retained by the issuer; or

• the risk-return profile;

(g) the costs and ease with which investors are able to sell the relevant financial instrument or switch to another financial instrument, or exit a structured deposit, taking into account, in particular, where applicable depending on whether the product is a financial instrument or structured deposit:

• (g) the bid-ask spread;

• the frequency of trading availability;

• the issuance size and size of the secondary market;

• the presence or absence of liquidity providers or secondary market makers;

• the features of the trading system; or

• any other barriers to exit or the fact that early withdrawal is not allowed;

(h) the pricing and associated costs of the structured deposit, financial instrument, financial activity or financial practice, taking into account, in particular:

• (h) the use of hidden or secondary charges; or

• charges that do not reflect the level of service provided;

(i) the degree of innovation of a financial instrument or structured deposit, a financial activity or financial practice, taking into account, in particular:

• (i) the degree of innovation related to the structure of the financial instrument, structured deposit, financial activity or financial practice, including embedding and triggering;

• the degree of innovation relating to the distribution model or length of the intermediation chain;

• the extent of innovation diffusion, including whether the financial instrument, structured deposit, financial activity or financial practice is innovative for particular categories of clients;

• innovation involving leverage;

• the lack of transparency of the underlying; or

• the past experience of the market with similar financial instruments, structured deposits or selling practices;

(j) the selling practices associated with the financial instrument or structured deposit, taking into account, in particular:

• (j) the communication and distribution channels used;

• the information, marketing or other promotional material associated with the investment;

• the assumed investment purposes; or

• whether the decision to buy is secondary or tertiary decision following an earlier purchase;

(k) the financial and business situation of the issuer of a financial instrument or structured deposit, taking into account, in particular:

• (k) the financial situation of the issuer or any guarantor; or

• the transparency of the business situation of the issuer or guarantor;

(l) whether there is insufficient, or unreliable, information about a financial instrument or structured deposit, provided either by the manufacturer or the distributors, to enable market participants at whom it is targeted to make an informed decision, taking into account the nature and type of the financial instrument or the structured deposit;

(m) whether the financial instrument, structured deposit, financial activity or financial practice poses a high risk to the performance of transactions entered into by participants or investors in the relevant market;

(n) whether the financial activity or financial practice would significantly compromise the integrity of the price formation process in the market concerned such that the price or value of the financial instrument or structured deposit in question is no longer determined according to legitimate market forces of supply and demand, or such that market participants are no longer able to rely on the prices formed in that market or in the volumes of trading as a basis for their investment decisions;

(o) whether a financial instrument, structured deposit, financial activity or practice would leave the national economy vulnerable to risks;

(p) whether the characteristics of a financial instrument or structured deposit make it particularly susceptible to being used for the purposes of financial crime and, in particular whether the characteristics could potentially encourage the use of the financial instrument or structured deposit for:

• (p) any fraud or dishonesty;

• misconduct in, or misuse of information, in relation to a financial market;

• handling the proceeds of crime;

• the financing of terrorism; or

• facilitating money laundering;

(q) whether a financial activity or a financial practice poses a particularly high risk to the resilience or smooth operation of markets and their infrastructure;

(r) whether a financial instrument, structured deposit, financial activity or financial practice could lead to a significant and artificial disparity between prices of a derivative and those in the underlying market;

(s) whether the financial instrument, structured deposit, financial activity or financial practice poses a high risk of disruption to financial institutions deemed to be important to the financial system of [F43 the United Kingdom], in particular considering the hedging strategy pursued by financial institutions in relation to the issuance of the structured deposit, including the mispricing of the capital guarantee at maturity or the reputational risks posed by the structured deposit or practice or activity to the financial institutions;

(t) the relevance of the distribution of the financial instrument or structured deposit as a funding source for the issuer or financial institutions;

(u) whether a financial instrument, structured deposit, financial activity or financial practice poses particular risks to the market or payment systems infrastructure, including trading, clearing and settlement systems; or

(v) whether a financial instrument, structured deposit, financial activity or financial practice would threaten investors' confidence in the financial system.

Textual Amendments

F37 Words in Art. 21 heading substituted (31.12.2020) by The Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1403), regs. 1(3), 61(2)(a) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F38 Words in Art. 21(1) substituted (31.12.2020) by The Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1403), regs. 1(3), 61(2)(b)(i) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F39 Words in Art. 21(1) substituted (31.12.2020) by The Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1403), regs. 1(3), 61(2)(b)(ii) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F40 Words in Art. 21(2) substituted (31.12.2020) by The Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1403), regs. 1(3), 61(2)(c)(i)(aa) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F41 Words in Art. 21(2) substituted (31.12.2020) by The Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1403), regs. 1(3), 61(2)(c)(i)(bb) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F42 Words in Art. 21(2)(b) substituted (31.12.2020) by The Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1403), regs. 1(3), 61(2)(c)(ii) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F43 Words in Art. 21(2)(s) substituted (31.12.2020) by The Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1403), regs. 1(3), 61(2)(c)(iii) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

SECTION 2 U.K. Position management powers

F44 Article 22 U.K. Position management powers of ESMA(Article 45 of Regulation (EU) No 600/2014)

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Textual Amendments

F44 Art. 22 omitted (31.12.2020) by virtue of The Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1403), regs. 1(3), 61(3) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

CHAPTER VI U.K. FINAL PROVISIONS

Article 23 U.K. Transitional provisions

1. By way of derogation from Article 5(1), from the date of entry into force of this Regulation until the date of application thereof, competent authorities shall carry out liquidity assessments and shall publish the result of those assessments immediately upon their completion in accordance with the following timeframe:

(a) where the date on which financial instruments are traded for the first time on a trading venue within the Union is a date not less than 10 weeks prior to the date of application of Regulation (EU) No 600/2014, competent authorities shall publish the result of the assessments no later than four weeks prior to the date of application of Regulation (EU) No 600/2014;

(b) where the date on which financial instruments are traded for the first time on a trading venue within the Union is a date falling within the period commencing 10 weeks prior to the date of application of Regulation (EU) No 600/2014 and ending on the day preceding the date of application of Regulation (EU) No 600/2014, competent authorities shall publish the result of the assessments no later than the date of application of Regulation (EU) No 600/2014.

2. The assessments referred to in paragraph 1 shall be carried out as follows:

(a) where the date on which financial instruments are traded for the first time on a trading venue within the Union is a date not less than sixteen weeks prior to the date of application of Regulation (EU) No 600/2014, the assessments shall be based on data available for a forty-week reference period commencing fifty-two weeks prior to the date of application of Regulation (EU) No 600/2014;

(b) where the date on which financial instruments are traded for the first time on a trading venue within the Union is a date within the period commencing sixteen weeks prior to the date of application of Regulation (EU) No 600/2014 and ending 10 weeks prior to the date of application of Regulation (EU) No 600/2014, the assessments shall be based on data available for the first four week trading period of the financial instrument.

(c) where the date on which financial instruments are traded for the first time on a trading venue within the Union is a date falling within the period commencing 10 weeks prior to the date of application of Regulation (EU) No 600/2014 and ending on the day preceding the date of application of Regulation (EU) No 600/2014, the assessments shall be based on the trading history of the financial instruments or other financial instruments considered to have similar characteristics to those financial instruments.

3. Competent authorities, market operators and investment firms including investment firms operating a trading venue shall use the information published in accordance with paragraph 1 for the purposes of Article 2(1)(17)(b) of Regulation (EU) No 600/2014 until 1 April of the year following the date of application of that Regulation.

4. During the period referred to in paragraph 3, competent authorities shall ensure the following with regard to the financial instruments referred to in points (b) and (c) of paragraph 2:

(a) that the information published in accordance with paragraph 1 remains appropriate for the purposes of Article 2(1)(17)(b) of Regulation (EU) No 600/2014;

(b) that the information published in accordance with paragraph 1 is updated on the basis of a longer trading period and a more comprehensive trading history, where necessary.

Article 24 U.K. Entry into Force

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

It shall apply from 3 January 2018.

However, Article 23 shall apply from the date of entry into force of this Regulation.

F45 ...

Done at Brussels, 18 May 2016.

For the Commission

The President

Jean-Claude Juncker

Textual Amendments

F45 Words in Signature omitted (31.12.2020) by virtue of The Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1403), regs. 1(3), 61(4) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

ANNEX U.K. Data to be provided for the purpose of determining a liquid market for shares, depositary receipts, exchange-traded funds and certificates

Table 1

Symbol table

Symbol	Data Type	Definition
{ALPHANUM-n}	Up to n alphanumerical characters	Free text field.
{ISIN}	12 alphanumerical characters	ISIN code, as defined in ISO 6166
{MIC}	4 alphanumerical characters	Market identifier as defined in ISO 10383
{DATEFORMAT}	ISO 8601 date format	Dates should be formatted by the following format: YYYY-MM-DD.
{DECIMAL-n/m}	Decimal number of up to n digits in total of which up to m digits can be fraction digits	Numerical field for both positive and negative values. decimal separator is ‘.’ (full stop); negative numbers are prefixed with ‘–’ (minus); values are rounded and not truncated.

Table 2

Details of the data to be provided for the purpose of determining a liquid market for shares, depositary receipts, exchange-traded funds and certificates

#	Field	Details to be reported	Format and standards for reporting
1	Instrument identification code	Code used to identify the financial instrument	{ISIN}
2	Instrument full name	Full name of the financial instrument	{ALPHANUM-350}
3	Trading venue	Segment MIC for the trading venue, where available, otherwise operational MIC.	{MIC}
4	MiFIR identifier	Identification of equity financial instruments Shares as referred to in Article 4(1)(44)(a) of Directive 2014/65/EU; Depositary receipts as defined in Article 4(1)(45) of Directive 2014/65/EU; Exchange-traded fund as defined in Article 4(1)(46) of Directive 2014/65/EU; Certificates as defined in Article 2(1)(27) of Regulation (EU) No 600/2014;	Equity financial instruments: ‘SHRS’ = shares ‘ETFS’= ETFs ‘DPRS’ = depositary receipts ‘CRFT’ = certificates
5	Reporting day	Date for which the data is provided Data has to be provided at least for the following dates: case 1: the day corresponding to the ‘Date of admission to trading or first trading date’ as per Article 5(3)(a); case 2: the last day of the 4 weeks period starting on the ‘Date of admission to trading or first trading date’ as per Article 5(3)(b)(i); case 3: the last trading day of each calendar year as per Article 5(3)(b)(ii); case 4: the day on which a corporate action is effective as per Article 5(3)(b)(iii). For case 1, estimates are to be provided for the fields 6 to 12 as applicable.	{DATEFORMAT}
6	Number of outstanding instruments	For shares and depositary receipts The total number of outstanding instruments. For ETFs Number of units issued for trading.	{DECIMAL-18/5}
7	Holdings exceeding 5 % of total voting rights	For shares only The total number of shares corresponding to holdings exceeding 5 % of total voting rights of the issuer unless such a holding is held by a collective investment undertaking or a pension fund. This field is to be populated only when actual information is available.	{DECIMAL-18/5}
8	Price of the instrument	For shares and depositary receipts only The price of the instrument at the end of the reporting day. The price should be expressed in euros.	{DECIMAL-18//13}
9	Issuance size	For certificates only The issuance size of the certificate expressed in euros.	{DECIMAL-18/5}
10	Number of trading days in the period	The total number of trading days for which the data is provided	{DECIMAL-18/5}
11	Total turnover	The total turnover for the period	{DECIMAL-18/5}
12	Total number of transactions	The total number of transactions for the period	{DECIMAL-18/5}

(1)

OJ L 173, 12.6.2014, p. 84.

(2)

Regulation (EU) No 1095/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Securities and Markets Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/77/EC (OJ L 331, 15.12.2010, p. 84).

(3)

Regulation (EU) No 1093/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Banking Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/78/EC (OJ L 331, 15.12.2010, p. 12).

(4)

Commission Delegated Regulation (EU) 2017/571 of 2 June 2016 supplementing Directive 2014/65/EU of the European Parliament and of the Council with regard to regulatory technical standards on the authorization, organisational requirements and the publication of transactions for data reporting services providers (see page 126 of this Official Journal).

(5)

Commission Delegated Regulation (EU) 2017/587 of 14 July 2016 supplementing Regulation (EU) No 600/2014 of the European Parliament and of the Council on markets in financial instruments with regard to regulatory technical standards on transparency requirements for trading venues and investment firms in respect of shares, depositary receipts, exchange-traded funds, certificates and other similar financial instruments and on transaction execution obligations in respect of certain shares on a trading venue or by a systematic internaliser (see page 387 of this Official Journal), Table 2 of Annex I.

(6)

Regulation (EU) No 236/2012 of the European Parliament and of the Council of 14 March 2012 on short selling and certain aspects of credit default swaps (OJ L 86, 24.3.2012, p. 1).