ESMA clarifies trading obligation for shares under MiFID II

MiFID Firms

Date: 20 November 2017

On 13 November 2017, the European Securities and Markets Authority (ESMA) updated its Question and Answers (Q&As) regarding the implementation of the Markets in Financial Instruments Directive (MiFID II). This update clarifies the application of the trading obligation for shares to trade certain instruments on-venue.

MiFIR introduces a trading obligation for shares that will require investment firms to ensure that the trades they undertake in shares admitted to trading on a regulated market, or traded on a trading venue, take place on a regulated market, MTF, systematic internaliser, or an equivalent third-country trading venue.


ESMA is aware that the scope of the trading obligation in Article 23, and the absence of the relevant equivalence decisions, might cause issues for investment firms that wish to undertake trades in non-EEA shares in the primary listing venues of such shares.  ESMA and the European Commission are working closely together to resolve those issues. While the Commission is preparing equivalence decisions for the non-EU jurisdictions whose shares are traded systematically and frequently in the EU, the absence of an equivalence decision taken with respect to a particular third country's trading venues indicates that the Commission has currently no evidence that the EU trading in shares admitted to trading in that third country's regulated markets can be considered as systematic, regular and frequent.