Activities of Eero HEINÄLUOMA related to 2021/0385(COD)
Shadow reports (1)
REPORT on the proposal for a regulation of the European Parliament and of the Council amending Regulation (EU) No 600/2014 as regards enhancing market data transparency, removing obstacles to the emergence of a consolidated tape, optimising the trading obligations and prohibiting receiving payments for forwarding client orders
Amendments (22)
Amendment 112 #
Proposal for a regulation
Recital 7
Recital 7
(7) Dark trading is trading without pre- trade transparency. The double volume cap (DVC)is a mechanism that limits the level of dark trading, using the reference price waiver laid down in Article 4(1), point (a) of Regulation (EU) No 600/2014 and the negotiated trade waiver laid down in Article 4(a) point (a), point (i) of that Regulation. The use of both waivers is capped by the double volume cap (‘DVC’). The DVC is a mechanism that limits the level of dark trading, to a certain proportion of total trading in an equity instrument. The amount of dark trading under both waivers in an equity instrument on an individual venue may not exceed 4% of total trading in that instrument in the Union. When this threshold is breached, dark trading under both waivers in that instrument on that venue is suspended. Secondly the amount of dark trading under both waivers in an equity instrument in the Union may not exceed 8% of total trading in that instrument in the Union. When this threshold is breached all dark trading under both waivers in that instrument is suspended. The DVC faces strong limitations as it does not limit trading without pre-trade transparency outside the two waivers it covers. The venue specific threshold leaves room for continued use of those waivers on other platforms on which trading in that equity instrument is not yet suspended, until the Union wide threshold is breached. This causes complexity in terms of monitoring the levels of dark trading and of enforcing the suspension. To simplify the double volume cap while keeping its effectiveness, the new single volume cap should rely solely on the EU-wide threshold. That threshold should be lowered to 7 % to compensate for a potential increase of trading under those waivers as a consequence of abolishing the venue specific thresholdcover non-pre-trade transparent trading, not only under both waivers but also including other non-price forming transactions below the large-in-scale threshold and subject to the share trading obligation. The volume cap threshold should be determined by ESMA. When defining the possible threshold, ESMA should take into account the impact of that measure on price formation, liquidity, and end investors’outcomes.
Amendment 126 #
Proposal for a regulation
Recital 11
Recital 11
(11) In order to reinforce the price formation process and to maintain a level playing field between trading venues and systematic internalisers, Article 14 of Regulation (EU) No 600/2014 requires systematic internalisers to make public all quotes in equity instruments placed by that systematic internaliser below the standard market size. Systematic internalisers are free to decide which sizes they quote, as long as they quote at a minimum size of 10% of the standard market size. That possibility, however, has led to very low levels of pre-trade transparency provided by systematic internalisers in equity instruments, and has hampered the achievement of a level playing field. It is therefore necessary to require systematic internalisers to publish firm quotes relating to a minimum of twice the standard market sizesize to be determined by ESMA. The minimum size should exceed twice the standard market size, and should be determined by the impact of the measure on price formation, liquidity, and end investors’ outcomes.
Amendment 130 #
Proposal for a regulation
Recital 12
Recital 12
Amendment 160 #
Proposal for a regulation
Recital 22
Recital 22
(22) There is an objective difference between a venue of primary admission and other trading venues that serve as secondary trading markets. A venue of primary admission admits companies to the public markets, playing a crucial role in the life of a share and for the share’s liquidity. This is particularly true in the case of shares listed on smaller regulated markets which remain typically traded mostly on the venue of primary admission. When the pre-trade transparent trading of a certain share takes place exclusively or predominantly on the venue of primary admission, such smaller venue plays a more important role in the price formation for that share. The core market data a smaller regulated market contributes to the consolidated tape therefore plays a more determining role in the price formation for the shares this venue admits to trading. A preferential treatment inIn smaller regulated markets the level of concentration of trading in shares, for which they are also the venue of primary admission, means that their relative contribution to the fragmentation of trading in the Union is less significant compared to that of larger regulated markets. The average daily trading volume of shares in the smaller regulated markets is relatively low, often accounting for less than 1 % of the average daily trading volume of the Union as a whole. Finally, smaller regulated markets that are not owned by larger groups of exchange operators are, on average, less diversified and more dependent on data revenues, and the inclusion of their pre- trade data on the consolidated tape for shares could deprive them of their most important source of income. Therefore, given the lower levels of fragmentation of smaller markets, their relative share of the overall trading landscape and legitimate concerns about the viability of their business, an exclusion from the mandatory inclusion of their revenue participation scheme is therefore considered appropriate to allow these smaller exchangeal time pre-trade data in the consolidated tape output should be considered appropriate to allow smaller regulated markets that are not owned by larger groups of exchange operators to maintain their local admissions and safeguard a rich and vibrant ecosystem in line with the objectives of the Capital Markets Union. From a procedural perspective, the first exclusion criterion should be market share; if the market share at any future point exceeds the threshold set out in this Regulation, fragmentation criteria should apply as alternative exemption criteria. Notwithstanding the mandatory inclusion exemption, smaller regulated markets that wish to be included in the consolidated view provided by the CT should be able to opt in into the mandatory inclusion scheme by notifying ESMA and the CTP of their intent.
Amendment 229 #
Proposal for a regulation
Article 1 – paragraph 2 – point d
Article 1 – paragraph 2 – point d
Regulation (EU) No 600/2014
Article 2 – paragraph 1 – point 36c a (new)
Article 2 – paragraph 1 – point 36c a (new)
(36c a) ‘market operator group’ means a corporate entity or grouping that owns or controls two or more market operators within the Union.
Amendment 236 #
Proposal for a regulation
Article 1 – paragraph 4 – point b
Article 1 – paragraph 4 – point b
Regulation (EU) No 600/2014
Article 5 – paragraph 1
Article 5 – paragraph 1
1. Trading venues shall suspend their use of the waivers referred to in Article 4(1), point (a), and 4(1), point (b)(iand systematic internalisers shall suspend trading as referred to in paragraph 4(b) where the percentage of this volume traded in the Union in a financial instrument carried out under those waivers exceeds 7% of the total volume traded in that financial instrument in the Union. Trading venues shall base their decision to suspend the use of those waiversexceeds the threshold determined by ESMA in accordance with paragraph 9. Trading venues and systematic internalisers shall base their decision on the data published by ESMA in accordance with paragraph 4, and shall take such decision within two working days after this publication of those data and for a period of six months.;
Amendment 242 #
Proposal for a regulation
Article 1 – paragraph 4 – point d
Article 1 – paragraph 4 – point d
Regulation (EU) No 600/2014
Article 5 – paragraph 4
Article 5 – paragraph 4
Amendment 243 #
Proposal for a regulation
Article 1 – paragraph 4 – point d
Article 1 – paragraph 4 – point d
Regulation (EU) No 600/2014
Article 5 – paragraph 4
Article 5 – paragraph 4
(d) paragraph 4 is replaced by the following: 4. ESMA shall publish within five working days of the end of each calendar month all of the following data: (a) the total volume of Union trading per financial instrument in the previous 12 months; (b) the percentage of trading in a financial instrument carried out across the Union under the waivers referred to in Article 4(1), point (a), and Article 4(1), point (b)(i), and without pre-trade transparency for orders subject to the share trading obligation and outside the waivers referred to in Article 4(1); (c) the methodology that is used to derive the percentage referred to in point (b).
Amendment 250 #
Proposal for a regulation
Article 1 – paragraph 4 – point f
Article 1 – paragraph 4 – point f
Regulation (EU) No 600/2014
Article 5 – Paragraph 7
Article 5 – Paragraph 7
7. 7. To ensure a reliable basis for monitoring the trading as referred to in paragraph 4(b) taking place under the waivers referred to in Article 4(1), point (a), and Article 4(1), point (b)(i) and for determining whether the limits referred to in paragraph 1 have been exceeded, operators of trading venues and systematic internalisers shall have in place systems and procedures to enable the identification of all trades referred to in paragraph 4(b) which have taken place on their venue under those waivers.;execution venue.
Amendment 254 #
Proposal for a regulation
Article 1 – paragraph 5 – point b a (new)
Article 1 – paragraph 5 – point b a (new)
Regulation (EU) No 600/2014
Article 9 – paragraph 5
Article 9 – paragraph 5
(ba) In paragraph 5 the following is added after point (e): (ea) the volume cap threshold as outlined in paragraph 1 and the method by which it is defined. When defining the possible threshold, ESMA should take into account the impact of that measure on price formation, liquidity, and end investors’ outcomes; (eb) the method, including the flagging of transactions, by which it collates, calculates and publishes the transaction data, as outlined in paragraph 4, in order to provide an accurate measurement of the total volume of trading per financial instrument and the percentages of trading that use those waivers across the Union and per trading venue. ESMA shall submit the draft regulatory technical standards referred to in points ea and eb to the Commission by ... [six months after the date of entry into force of this amending Regulation.
Amendment 284 #
Proposal for a regulation
Article 1 – paragraph 8 – point a
Article 1 – paragraph 8 – point a
Regulation (EU) No 600/2014
Article 14 – paragraph 2
Article 14 – paragraph 2
2. This Article and Articles 15, 16 and 17 shall apply to systematic internalisers when they deal in sizes up to twice the standard market sizehe size determined by ESMA in accordance with paragraph 7. Systematic internalisers shall not be subject to this Article and Articles 15, 16 and 17 when they deal in sizes above twice the standard market size.
Amendment 289 #
Proposal for a regulation
Article 1 – paragraph 8 – point a
Article 1 – paragraph 8 – point a
Regulation (EU) No 600/2014
Article 14 – paragraph 3
Article 14 – paragraph 3
3. Systematic internalisers are allowed to quote any size. The’ minimum quoting size shall be at least the equivalent of twice the standard market size offor a share, depositary receipt, ETF, certificate, or other financial instrument that is similar to those financial instruments and that is traded on a trading venueraded on a trading venue shall be the determined by ESMA in accordance with paragraph 7. For a particular share, depository receipt, ETF, certificate or other financial instrument that is similar to those financial instruments and that is traded on a trading venue, each quote shall include a firm bid and offer price, or firm bid and offer prices for a size or sizes which could be up to twice the standard market sizeize determined by ESMA in accordance with paragraph 7 for the class of shares, depositary receipts, ETFs, certificates or financial instruments that are similar to those financial instruments, to which the financial instrument belongs. The price or prices shall reflect the prevailing market conditions for that share, depositary receipt, ETF, certificate or financial instrument that is similar to those financial instruments.’;
Amendment 293 #
Proposal for a regulation
Article 1 – paragraph 8 – point b b (new)
Article 1 – paragraph 8 – point b b (new)
Regulation (EU) No 600/2014
Article 14 – Paragraph 7 - first subparagraph
Article 14 – Paragraph 7 - first subparagraph
Amendment 298 #
Proposal for a regulation
Article 1 – paragraph 8 e (new)
Article 1 – paragraph 8 e (new)
Regulation (EU) No 600/2014
Article 15 – Paragraph 1
Article 15 – Paragraph 1
(8 a) In Article 15 Execution of client orders , paragraph 1 is replaced by the following: ‘1. Systematic internalisers shall make public their quotes on a regular and continuous basis during normal trading hours. They may update their quotes at any time. They shall be allowed, under exceptional market conditions, to withdraw their quotes. The quotes shall be made public in a manner which is easily accessible to other market participants on a reasonable commercial basis. Member States shall require that firms that meet the definition of systematic internaliser notify their competent authority. Such notification shall be transmitted to ESMA. ESMA shall establish a list of all SIs in the Union. Member States shall require that firms that meet the definition of systematic internaliser provide the competent authority with a detailed description of the functioning of the systematic internaliser, including any links to or participation by a regulated market, an MTF, an OTF or a systematic internaliser owned by the same investment firm, and a list of their members, participants and/or users. Competent authorities shall make that information available to ESMA on request. Member States shall require that firms that meet the definition of systematic internaliser establish and implement transparent and non-discriminatory rules and objective criteria for the efficient execution of orders. They shall have arrangements for the sound management of the technical operations of the facility, including the establishment of effective contingency arrangements to cope with risks of systems disruption.
Amendment 300 #
Proposal for a regulation
Article 1 – paragraph 8 a (new)
Article 1 – paragraph 8 a (new)
Regulation (EU) No 600/2014
Article 15 – Paragraph 4
Article 15 – Paragraph 4
(b) In Article 15, paragraph 4 is deleted.;
Amendment 302 #
Proposal for a regulation
Article 1 – paragraph 8 a (new)
Article 1 – paragraph 8 a (new)
(c)In Article 15, paragraph 5 is replaced by the following: ‘5. The Commission shall be empowered to adopt delegated acts in accordance with Article 50, clarifying what constitutes a reasonable commercial basis to make quotes public as referred to in paragraph 1. ESMA shall develop draft implementing technical standards to determine the content and format of the description and notification referred to in paragraph 1. ESMA shall submit those draft regulatory technical standards to the Commission by ... [six months after the date of entry into force of this amending Regulation. Power is conferred on the Commission to adopt the implementing technical standards referred to in the first subparagraph in accordance with Article 15 of Regulation (EU) No 1095/2010.
Amendment 305 #
Proposal for a regulation
Article 1 – paragraph 8 g (new)
Article 1 – paragraph 8 g (new)
Regulation (EU) No 600/2014
Article 16 – Paragraph 1
Article 16 – Paragraph 1
(8 b) "Article 16 is amended as follows: (a) paragraph 1 is replaced by the following: ‘The competent authorities shall check the following: (a) that investment firmsfirms that meet the definition of systematic internaliser regularly update bid and offer prices published in accordance with Article 14 and maintain prices which reflect the prevailing market conditions; (baa) that investment firmsfirms that meet the definition of systematic internaliser comply with the conditions for order execution laid down in Article 15(1); (b) that firms that meet the definition of systematic internaliser comply with the conditions for price improvement laid down in Article 15(2). "
Amendment 326 #
Proposal for a regulation
Article 1 – paragraph 10
Article 1 – paragraph 10
Regulation (EU) No 600/2014
Article 22a – paragraph 1 a (new)
Article 22a – paragraph 1 a (new)
1a. All market data contributors will provide the CTP with all core data in real time. However, regulated markets whose average daily trading volume of shares represents less than 1 % of the average daily trading volume of the Union, and who do not form part of a market operator group that operates regulated markets that collectively represent more than 2% of the average daily trading volume in the union shall not be required to permit their pre trade market data to be published by the CTP in real time;
Amendment 332 #
Proposal for a regulation
Article 1 – paragraph 10
Article 1 – paragraph 10
Regulation (EU) No 600/2014
Article 22 a – paragraph 2 a (new)
Article 22 a – paragraph 2 a (new)
2 a. Regulated markets whose average daily trading volume of shares exceeds 1 % of the average trading volume of the Union, and who do not form part of a market operator group that operates regulated markets that collectively represent more than 2% of the average daily trading volume in the union, shall not be required to permit their pre-trade market data to be published by the CTP in real time if: (i) the regulated market accounts for more than 85% of the average daily trading volume of shares that were first admitted to trading on that regulated market; or (ii) the average daily trading volume of shares first admitted on a regulated market on MTFs and systematic internalisers collectively is 15% or less of the average daily trading volume of those shares. ESMA shall publish on its website a list of regulated markets exempted from permitting their pre-trade market data to be published by the CTP in real time and shall update that list regularly.
Amendment 336 #
Proposal for a regulation
Article 1 – paragraph 10
Article 1 – paragraph 10
Regulation (EU) No 600/2014
Article 22a – paragraph 2 b (new)
Article 22a – paragraph 2 b (new)
2 b. Notwithstanding paragraphs 1a and 2a, smaller regulated markets may decide to permit their pre-trade market data to be published by the CTP in real time, subject to the provisions of paragraph 1, by notifying ESMA and the CTP.
Amendment 337 #
Proposal for a regulation
Article 1 – paragraph 10
Article 1 – paragraph 10
Regulation (EU) No 600/2014
Article 22a – paragraph 2 c (new)
Article 22a – paragraph 2 c (new)
2 c. Each CTP shall be free to choose, from among the types of connection and formats that the market data contributors offer to other users, which connection it wishes to use for the provision of those data. Market data contributors shall not receive any remuneration for providing the connectivity other than the revenue sharing for shares, as specified in the conditions for appointment of the CTP in the selection process laid down in 27da.
Amendment 338 #
Proposal for a regulation
Article 1 – paragraph 10
Article 1 – paragraph 10
Regulation (EU) No 600/2014
Article 22a – paragraph 3
Article 22a – paragraph 3
3. Market data contributors shall, with regard to transactions in the instruments referred to in paragraph 1 that are concluded by investment firms outside a trading venue, provide the CTP with the market data concerning those transactions through an APA. Market data providers shall, with regard to the best bids and offers in shares provided by investment firms outside a trading venue, provide the CTP with the market data concerning those bids and offers either directly or through an APA.