On September 28, the European Securities and Markets Authority (ESMA) issued a press release (Press Release) that it and the national competent authorities (NCAs) had agreed to a work plan (Work Plan) on completing the opinions that must be issued by ESMA under the Markets in Financial Instruments Directive (MiFID II) and Regulation (MiFIR) in regards to both pre-trade transparency waivers and position limits for commodity derivatives. The Work Plan is required because there is not sufficient time for ESMA to write all the requisite opinions before the MiFID II and MiFIR January 3, 2018, effective date; MiFIR does not include any transitional provisions for the issuance of the ESMA opinions.

Under the Work Plan, the NCAs will now publish position limits ahead of the ESMA opinions. The published NCA position limits will enter into force on January 3, 2018. ESMA will issue its opinions at a later date, at which point the relevant NCA has agreed to either modify its position limits to conform to the opinion or justify to ESMA why no modification is required. MiFID II currently mandates that ESMA must publish opinions on the commodity derivative position limits notified by an NCA before the limits can become effective, which means that all such opinions by ESMA would had to have been issued prior to January 3, 2018.

The Work Plan provides that ESMA will prioritize work on opinions for pre-trade transparency waivers for equity instruments, which it intends to have completed by the end of 2017. Although ESMA will try to complete as many opinions on non-equity instruments before the MiFID II and MiFIR become effective, ESMA recognizes that the majority of opinions to be issued may still be outstanding. Therefore, ESMA and the NCAs have agreed that pending the issuance of an ESMA opinion, the NCA will grant the requested pre-trade transparency waivers based on their own compliance evaluation. Any such grant by an NCA is subject to the condition that the waiver is granted: (1) on a temporary basis; (2) on a provisional basis; or (3) via other administrative arraignments to ensure that the waiver can be revaluated following the ESMA opinion, and the requesting trading venue is duly informed. ESMA has indicated that it intends to publish Q&A addressing non-equity waiver notifications.

A copy of the Press Release is available here.

A copy of the Work Plan is available here.