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MiFID II - Levels

The MiFID and MiFIR – Directive and Regulation respectively – are the framework rules that were adopted and published in the Official Journal of the EU on 12 June 2014.

Supplementary rules

Most of the supplementary rules under MiFID II are in delegated acts drawn up by the European Commission and in technical standards of the European Securities and Markets Authority (ESMA).

For more information, please also look at ‘Lamfalussy procedure’.

Delegated acts

A delegated act is based on a recommendation from ESMA, and translated into legislation by the European Commission (EC). A delegated act can be either a delegated directive or a delegated regulation.

There is a single delegated directive. It does not operate directly, and has to be implemented in national legislation. In the Netherlands, this legislation is the Decree on Conduct of Business Supervision of Financial Undertakings under the FSA (BgfO). There are two delegated regulations. Each operates directly, so that implementation in national legislation is not necessary.

After the EC has published the delegated acts, they still need to receive endorsement by the Council and the European Parliament. These two bodies have three months in which to lodge objections.

Technical standards

In 2015, ESMA published the regulatory technical standards (RTS) and the implementing technical standards (ITS) for the Markets in Financial Instruments Directive II (MiFID II).

Implementing technical standards
On 11 December 2015, ESMA published the implementing technical standards (ITS) for the Markets in Financial Instruments Directive II (MiFID II). The ITS translate the regulations into practical terms for market parties, market infrastructure and national supervisors. Publication of the current ITS supplements two other sets of technical standards for the implementation of MiFID II. All the sets of technical standards have been submitted by ESMA to the European Commission for its approval.

The ITS specify standard forms, templates and procedures for the following:

  • Standard forms, templates and procedures for cooperation arrangements
  • Suspension and removal of financial instruments from trading on RM, a MTF or OTF
  • Standard forms, templates and procedures for the authorisation of data reporting services providers
  • Format and timing of weekly position reports
  • Weekly position reports
  • Standard forms, templates and procedures for competent authorities to cooperate in supervisory activities, on-site verifications, and investigations and for the exchange of information investigations, and for the exchange of information
  • Standard forms, templates and procedures for the consultation of other competent authorities prior to granting an authorisation
  • Procedures and forms for submitting information on sanctions and measures.

Regulatory technical standards
On 28 September 2015, ESMA published regulatory technical standards for MiFID II. The RTS have been submitted to the European Commission, which has three months to approve them through the endorsement procedure. After this, the European Parliament and the Council can still lodge objections against the standards.
This process releases the standards for transparency matters (pre-trade and post-trade transparency equity as well as non-equity instruments), microstructural matters, organisational criteria for trading venues, data publication and accessibility, transaction reporting, post-trading, commodity derivatives, and best execution.

Guidelines

For a number of areas, ESMA has received instructions to prepare guidelines, with the aim of harmonising EU supervision as regards certain MiFID II standards.

Q&As

ESMA develops questions and answers (Q&As) for the application of MiFID II/ MiFIR. It is a practical convergence tool used to promote common supervisory approaches and practices. ESMA will periodically review these Q&As on a regular basis to update them where required and to identify if, in a certain area, there is a need to convert some of the material into ESMA Guidelines and recommendations.

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