ESMA consults on proposals for a review of the MiFID II best execution reporting regime

The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, today launches a consultation on proposals for improvements to the MiFID II framework on best execution reports. These proposals aim at ensuring effective and consistent regulation and supervision and enhancing investor protection.

ESMA’s proposals include technical changes to:

 the reporting obligations for execution venues:

aimed at simplifying the reporting requirements by reducing the granularity and volume of data to be reported; and

moving to a set of seven indicators aimed at disclosing meaningful information to help firms to assess venues’ execution quality; and

the reporting requirements for firms: focusing mainly on clarifying the requirements for firms that transmit client orders or decisions to deal to third parties for execution.

In addition, it proposes amendments to the relevant provisions of the MiFID II legislative framework to enable these technical changes to come into effect in the future.

Stakeholders are invited to provide their responses by 23 December 2021.

Next Steps

Since ESMA’s technical proposals can only be implemented after the relevant provisions of MiFID II have been amended, the outcome of this consultation will not lead to any immediate change of the existing RTSs 27 and 28 which currently regulate best execution reporting by execution venues and investment firms.

However, ESMA will consider the input received in supporting the European Commission in its assessment of the adequacy of the best execution reporting obligations, and any subsequent technical work to shape a well-functioning reporting regime.