The objectives of MiFID II/R are to increase market transparency, efficiency and safety by bringing the majority of non-equity products into a robust regulatory regime and moving a significant part of OTC trading onto regulated platforms.

MiFID II/R Level 2

MiFID II/R brings much of the transparency traditional in equity markets to bond trading. Europe will go further with bond transparency rules than just about anywhere in the world, including the US. MiFID II/R’s regulatory regime brings into effect pre-trade transparency for bonds as well as post-trade. This will result in a significant impact on the market structure of bond markets. Bond pre-and post-trade transparency requirements will be calibrated for different types of bond market trading structures such as quote-driven, hybrid and periodic auction trading systems. In order to calibrate bonds correctly for MiFID II/R transparency obligations, IT systems had to be enhanced, developed or built from scratch - a major undertaking for the industry. Banks, regulators and investors are dependent on data collected to meet MiFID II/R’s commitments.

Owing to the need for an IT build both by National Competent Authorities and by the industry, MiFID II/R was delayed by one year and took effect on 3 January 2018.

MiFID II/R timeline:

MiFID II/R and MiFIR entered into force on 3 January 2018, following a 12-month delay agreed by legislators in June 2016 from the original date of 3 January 2017. 

ESMA is expected to publish further Q&As to assist market participants in understanding the Level 2 text.

MiFID II/R and Fixed Income: an overview
Includes MiFID II’s pre- and post-trade transparency requirements (including SI Regime), new market structure, best execution reporting obligations, and new research dynamics.

See also: MiFID II/R implementation (covering primary markets, secondary markets, repo markets and asset management).


MIFID II/R PAPERS AND RESPONSES TO CONSULTATIONS

25 January 2023
ICMA proposal for an EU Sovereign bond transparency regime framework

24 November 2022
ICMA has responded to the UK FCA’s Consultation Paper on the Trading Venue Perimeter

29 April 2022
ICMA has responded to ESMA’s consultation on trading venue perimeter

22 March 2022
ICMA feedback for the European Commission - proposed amended text

15 December 2021
ICMA response to ESMA Consultation Paper on Review of the MiFID II framework on best execution reports

8 December 2021
ICMA proposal for a new post-trade transparency regime for the EU corporate bond market

1 October 2021
ICMA response to ESMA's consultation on the RTS 1 and RTS 2 Review

24 September 2021
ICMA response to HM Treasury Wholesale Markets Review

10 June 2021
ICMA response to ESMA consultation paper on the transparency regime for non-equity instruments and the trading obligations for derivatives MiFID II/ MiFIR review report

12 March 2021
ICMA response to ESMA consultation paper on algo trading

8 January 2021
ICMA response to ESMA Consultation Paper on Guidelines on the MiFID II/ MiFIR obligations on market data

25 November 2020
ICMA response to ESMA's consultation paper on MiFID II/ MiFIR review on the functioning of Organised Trading Facilities (OTF)

20 November 2020
ICMA response to ESMA's MiFIR review report on the obligations to report transactions and reference data

12 June 2020
ICMA response to ESMA's consultation paper on MiFID II/ MiFIR review report on the transparency regime for non-equity and the trading obligations for derivatives

15 May 2020
ICMA response to European Commission MiFID II/R review consultation paper

Secondary bond markets and fintech can be found on the following pages:
MiFID II Review – general questions in relation to bond markets – p. 8 – 12
Consolidated tape for EU bond markets – p. 14 – 27
Post-trade transparency in bond markets – p. 35
Best execution in bond markets – p. 57 – 61
Research unbundling for bond markets – p. 61 – 69
Multilateral systems in bond markets – p. 80 – 81
Non-discriminatory access in relation to bond markets – p. 84 – 86
Digitalisation and new technologies in relation to bond markets  – p. 87 - 90

April 2020
EU Consolidated Tape for Bond Markets- Final report for the European Commission (ICMA MiFID II Consolidated Tape Taskforce)

March 2020
Joint Trade Association letter to EC and ESMA regarding MIFID Consultations

March 2020
ICMA response to ESMA’s consultation paper on the MiFIR report on Systematic Internalisers in non-equity instruments

January 2020
A consolidated tape for EU bond markets By Elizabeth Callaghan (From MiFID II Data Workstream Taskforce, a subset of the MiFID II Working Group [MWG]).

MIFID II/R LEGISLATION AND RELATED DOCUMENTS


Level 1:
Markets in Financial Instruments (MiFID II) - Directive 2014/65/EU
Markets in Financial Instruments (MiFIR) - Regulation (EU) No 600/2014

Level 2:
Overview and state of play of RTS and ITS relating to MiFID/MiFIR
ESMA – Policy activities related to MiFID (II) and MiFIR  

RTS 2: Transparency requirements for trading venues and investment firms in respect of bonds, structured finance products, emission allowances and derivatives
Annex to RTS 2

RTS 27: Best Execution – Reporting criteria
Annex to RTS 27

RTS 28: Best Execution – Quality of execution
Annex to RTS 28

Level 3:

MiFID (II) - Investor Protection:

Q&A on MiFID (II) and Investor Protection

MiFID (II) MiFIR and Secondary Markets:

Q&A on MiFID II and MiFIR transparency topics

Q&A on MiFIR data reporting

Q&A on MiFID II and MiFIR market structures topics

Notes & Briefings:
ESMA Briefing on the Legal Entity Identifier (LEI) – 9 October 2017 (ESMA70-145-238)
ESMA Briefing - MiFID II technical data reporting requirements - 16 January 2017 (ESMA00-6-265)
ESMA Note on MIFID/MIFIR implementation: Delays in the go-live date of certain MIFID provisions - 17 November 2015 (ESMA/2015/1514)

Resources related to transparency calculations and liquidity assessments of bonds:
ESMA Financial Instruments Transparency System (FITRS) (applicable since 16 May 2018)
ESMA LIS and SSTI thresholds for bonds
ESMA Transitional Transparency Calculations (applicable until 15 May 2018)
ESMA FAQ document related to MiFID II Transitional Transparency Calculations (applicable until 15 May 2018)
ESMA List of bonds deemed liquid or illiquid (applicable until 15 May 2018) [for other asset classes, ESMA only includes the instruments that are liquid – for bonds illiquid instruments are also listed]
ESMA List of credit derivatives deemed liquid (applicable until 15 May 2018)
ESMA List of interest rate derivatives deemed liquid (applicable until 15 May 2018)



See also:
Archive



Contacts:

Andy Hill
Deputy Head, Market Practice and Regulatory Policy; secretary to the Secondary Market Practices Committee and also responsible for overseeing repo policy.
Direct line: +44 20 7213 0335

Julia Rodkiewicz
Director, Market Practice and Regulatory Policy
Direct line: +32 2 801 13 88

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