Position limits and transparency waiver plan

Position limits and transparency waiver plan

With a compliance deadline looming in January 2018, the European Securities and Markets Authority (ESMA) has announced changes in its approach to position limits and pre-transparency waivers. Carolyn Jackson, partner at Katten Muchin Rosenman UK LLP, assesses an arrangement that shares the workload between domestic and European regulators.

Original news

The ESMA and national competent authorities (NCAs) have updated their work plan for the opinions on pre-trade transparency waivers and position limits that must be issued under the Markets in Financial Instruments Directive (Directive 2014/65/EU) (MiFID II) and Markets in Financial Investments Regulation (Regulation) 600/2014/ EU) (MiFIR). In view of the large number of opinions to be issued, the work plan presents a pragmatic approach for ensuring that the waivers and position limits can be implemented as of 3 January 2018, pending the issuance of the opinions.

Why has ESMA had to update its work plan for the opinions on pre-trade transparency waivers and position limits?

MiFID II and MiFIR are an ambitious, wide ranging financial reform of the EU financial markets. Not only do they amend existing regulation and procedures under Markets in Financial Instruments Directive 2004/39/EC (MiFID I), including pre-trade transparency waivers, they also introduce new obligations, such as position limits. The EU position limit regime is more wide-reaching and comprehensive than the current regime in the US. ESMA has extensive obligations placed on it under MiFID II and MiFIR, including the requisite opinions regarding pre-trade transparency waivers and position limits, continuing to offer guidance to the EU market place through Q&As issued on a variety of MiFID II and MiFIR topics as well as addressing the European Markets Infrastructure Regulation (EMIR) review.

The plan agreed between ESMA and the NCAs represents a sensible and pragmatic solution of a division of labour between ESMA and the NCAs to permi

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About the author:

Meet Emma:

1.Banking and finance lawyer with experience in derivatives, debt capital markets, securitisation and structured finance in London and Paris

2.Likes ballet, playing the harp and holidays

3.Thinks the law is always changing!

Emma trained and qualified at Allen & Overy LLP and worked in their derivatives and structured finance teams in London and Paris.  She then joined the foreign exchange prime brokerage legal team at Deutsche Bank before spending 4 ½ years with Crédit Agricole CIB advising the fixed income and derivatives desk.