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The European Securities and Markets Authority (ESMA) has issued a public statement providing clarity to market participants on reporting requirements under RTS 28, pending full application of the new rules under MiFID II.
According to the European regulator, national competent authorities (NCAs) are not expected to prioritise supervisory actions towards investment firms relating to the periodic RTS 28 reporting obligation.
This will take effect from 13 February 2024 and until the forthcoming transposition into national legislation in all member states of the MiFID II review.
Previously, Article 27(6) MiFID II required investment firms to make public the top five execution venues where they executed client orders in the preceding year, as well as information on the quality of execution obtained.
Under the reviewed MiFID II and MiFIR framework, investment firms are no longer required to annually report detailed information on trading venues and execution quality through RTS 28 reports.
According to Recital 8 of the MiFID II review amending directive, evidence and feedback from stakeholders have shown that those reports are “hardly read and do not enable investors or other users of those reports to make meaningful comparisons based on the information provided in them”.
Consequently, investment firms may still need to make these reports public in 2024 and until the date of transposition of the directive in the respective member state.
ESMA stresses the importance of the best execution requirements under both the current and the reviewed MiFID II framework.
It adds that investment firms are required to strictly adhere to best execution requirements and NCAs are expected to supervise their compliance.
After the date of entry into force of the new directive amending MiFID II, member states will have 18 months to transpose it into national law.
ESMA’s recent statement aims to promote coordinated action by NCAs under MiFID II.
