On June 8, the European Commission adopted two delegated acts to supplement the amended and restated Markets in Financial Instruments Directive (MiFID II). The delegated acts take the form of a directly applicable regulation (together, Delegated Regulations)—meaning that they will be binding laws in each of the 28 EU member states without any need for local law implementation or, significantly, any interpretation. They cover: (1) data to be published by execution venues on the quality of execution of transactions (Data Delegated Regulation), and (2) information to be published by investment firms on the identity of execution venues and on the quality of execution (Information Delegated Regulation).
Under MiFID II, trading venues and systematic internalizers are required to publish data on the quality of execution of financial instruments subject to the trading obligation at least annually. Execution venues also are under the same obligation for financial instruments not subject to the trading obligation. The Data Delegated Regulation further specifies the information to be published in relation to price, costs and likelihood of execution, and requires execution venues to publish that information within three months following the end of each quarter (among other things). MiFID II also requires investment firms to publish the top five execution venues by trading volumes for each class of financial instrument annually, and the Information Delegated Regulation further specifies the content and format for these reports.
As mentioned in previous updates, the European Council and European Parliament will consider the Delegated Regulations and, once formally approved, the Delegated Regulations will go into effect 20 days following their publication in the Official Journal of the European Union.