The European Parliament decided not to object to the Commission delegated regulation of 17 November 2017 supplementing Regulation (EU) No 600/2014 of the European Parliament and of the Council on markets in financial instruments with regard to regulatory technical standards on the trading obligation for certain derivatives.
As a reminder, Regulation (EU) No 600/2014 of the European Parliament and of the Council on markets in financial instruments and amending Regulation (EU) No 648/2012 (MiFIR Regulation) introduces a trading obligation for derivatives.
In accordance with Article 28 of MiFIR, derivatives that are subject to the trading obligation may only be traded on a regulated market, multilateral trading facility, organised trading facility or third-country trading venue deemed to be equivalent by the Commission.
The European Market Infrastructure Regulation (EMIR) entrusts the European Securities and Markets Authority (ESMA) with the task of developing draft regulatory technical standards to clarify which classes of derivatives may be used to satisfy the clearing obligation imposed by Article 4 for over-the-counter derivatives belonging to a class of derivatives which has been declared subject to the clearing obligation.
The delegated regulation sets out in its Annex the classes of derivatives that should be subject to the trading obligation introduced by Article 28 of MiFIR.
ESMA submitted the draft regulatory technical standard (RTS) on 28 September 2017 with an accompanying letter to the Commission, asking all parties involved to commit to shortening their deadlines to ensure that the political objective for the trading obligation to apply as of 3 January 2018 is achieved.
Parliament considered that the regulatory technical standards adopted is not the same as the draft regulatory technical standard submitted by ESMA due to the Commission’s amendments to the text. Parliament considered that it has three months to object to the regulatory technical standards (‘scrutiny period’).
The delegated regulation should apply from 3 January 2018, the date of application of Directive 2014/65/EU (MiFID II) and Regulation (EU) No 600/2014 (MiFIR). However, the full use of the three-month scrutiny period available to Parliament would go beyond the date on which the rules on the trading obligation take effect.
Parliament underlined the importance of the Commission finalising the appropriate equivalence decisions before the trading obligation comes into effect. It therefore considered that a swift publication of the delegated regulation in the Official Journal would allow for timely implementation and legal certainty concerning the provisions applicable to the trading obligation for derivatives.