ESMA_QA_1370

Status: ✅ Answer Published

Link to ESMA Q&A tool: https://www.esma.europa.eu/publications-data/questions-answers/1370

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Regulatory Context

Regulation : MIFIR

Level 1 Regulation: Markets in Financial Instruments Regulation (MiFIR) Regulation (EU) No 600/2014- Secondary Markets

Level 2 Regulation: No information available

Level 3 Regulation: No information available

Topic: Pre-trade transparency waivers

Subject Matter: Q&A on cross orders in non-equity instruments below LIS

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Question

Submission Date: 05 July 2023

Is it possible to execute cross orders in liquid non-equity instruments below the large in scale (LIS) thresholds on a trading venue?

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ESMA Answer

Answer Date: 26-05-2023

MiFIR requires that all orders in non-equity instruments are subject to pre-trade transparency unless the order benefits from a waiver from pre-trade transparency. However, ESMA considers it possible to cross orders (buy and sell orders from the same member or two members having prior knowledge of the orders) on a trading venue subject to certain conditions. In that respect, cross orders in liquid instruments below the LIS thresholds which are subject to pre-trade transparency and to which no pre-trade transparency waiver applies can be matched on a trading venue only when the venue ensures that other market participants are given a reasonable chance to interact in a competitive way with the crossing, including via a waiting period before matching. Trading venues shall set the parameters of the waiting period by taking into account the technological capacities to price the financial instrument concerned and route associated orders.

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This document was automatically extracted from the ESMA EMIR Q&A database.