FIA EPTA response to the first section of ESMA’s Third Consultation Package on MiFIR Level 2 measures. This package includes proposed changes to RTS 1, the Liquid Market definition and equity CTP input/output requirements. FIA EPTA’s response is confined to the proposals regarding SI equity pre-trade transparency in RTS 1. Overall, FIA EPTA members are supportive of the approach taken by ESMA given the constraints at Level 1. However, we don’t believe these changes will achieve the objective of improved SI transparency. Instead, we recommend changing post-trade transparency requirements in the manner set out in our Mind the Transparency Gap paper. We note the changes to the SI quoting obligation will make it harder for true risk-taking SIs to provide liquidity and may damage EU competitiveness as a consequence. Further, ESMA should be empowered to adjust these technical requirements that deserve frequent recalibration rather than having them set at Level 1.
