In November 2021, the European Commission published its proposal to amend MiFIR as part of the Capital Markets Union (CMU) initiative.
Today, ESMA have stated their support for these changes.
Specifically regarding proposals to update MIFIR reporting, ESMA states; "ESMA would like to emphasise the benefits that a broader revision of MiFIR in relation to reporting requirements could bring. Reducing the complexity and scale of reporting while improving data quality can contribute positively to the CMU objectives. In line with the principles outlined in the Commission data strategy, ESMA’s Final Report on the MiFIR review of the obligations to report transactions and reference data6 aimed at simplifying and streamlining the current reporting regimes whilst ensuring quality and usability of the reported data, thus reducing compliance costs for reporting entities.
ESMA suggests that co-legislators consider replacing the ToTV concept to avoid gaps in reporting and transparency publications under MiFIR. This concept should be replaced with the Systematic Internaliser (SI) approach as advised in the Final Report, whereby the respective MiFIR obligations would apply to derivatives belonging to the same sub asset class of derivatives for which the investment firms is an SI. Such approach would also facilitate the creation of the derivatives CTP, as described above. In addition, ESMA would like to highlight 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 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. We would invite the co-legislators to consider permitting NCAs to share transaction reports for wider purposes. Lastly, ESMA stands ready to contribute to the objectives of the Commission data strategy by regularly reviewing its technical standards to ensure alignment across reporting regimes, provide for reusability of data and thus reduce compliance costs as well as achieving better data quality. For this purpose, it would also be helpful if co-legislators were able to broaden the mandates for ESMA to develop technical standards under Articles 26 on transactions reporting and 27 on reference data.