The European Securities and Markets Authority has published a consultation proposing amendments to the Regulatory Technical Standards on the equity transparency obligations of trading venues and investment firms (Commission Delegated Regulation (EU) 2017/587, known as 'RTS 1';) under the Markets for Financial Instruments Regulation. MiFIR requires Systematic Internalisers to make public firm quotes in equity instruments. The quotes must: (i) be at least equivalent of 10% of the standard market size for the quoted instrument; (ii) include both a bid and offer price; and (iii) reflect the prevailing market conditions for that instrument. RTS 1 specifies the concept of 'prices reflecting prevailing market conditions' as being 'close in price, at the time of publication, to quotes of equivalent sizes for the same financial instrument on the most relevant market in terms of liquidity'. ESMA is of the view that this specification needs to be amended because the quotes of an SI can only adequately reflect prevailing market conditions when the quotes reflect the minimum price increments ('tick sizes') quoted for a financial instrument on a trading venue.

ESMA is also seeking to make other changes to RTS 1 to correct changes that were made to the final draft RTS when published in the Official Journal of the European Union. ESMA considers that the changes may lead to inconsistent application of the requirements.

Feedback on the proposals is requested by January 25, 2018. Final draft RTS amending RTS 1 will be prepared on the basis of feedback to the consultation. The European Commission will consider whether to adopt the final draft RTS amending RTS 1. Despite the consultation, the requirements currently set out in RTS 1 will apply from January 3, 2018.

View the consultation paper.

View RTS 1.