Statement on the Operation of the MiFID Markets Regime

On this page we provide a statement on the operation of the MiFID Markets Regime after the transition period ends.

We have published a Supervisory Statement to help market participants understand our approach to the operation of the MiFID regime after the end of the transition period. The statement covers a range of issues including the Double Volume Cap, transparency waivers and deferrals, equity transparency, bond transparency, derivatives transparency and commodity position limits.

This statement replaces similar statements we issued in March and October 2019. It is part of our necessary preparations for the possibility that at the end of the transition period there is not a free trade agreement between the UK and EU and no mutual equivalence decisions in areas relevant to the MiFID Markets Regime. Therefore, it may be subject to change in the event of a free trade agreement being reached and mutual equivalence decisions being taken. We may also revise our approach as market conditions develop.

Update: 2 February 2021 – Trading of Swiss shares

Pending Parliamentary approval of HMT’s equivalence decision and action by the Swiss Government, it will soon be possible for UK firms to meet their obligations under the share trading obligation on Swiss exchanges and for UK trading venues to be able to offer trading in Swiss shares. We are confirming, consistent with the above Supervisory Statement, how aspects of UK markets regulation will apply to Swiss shares that resume trading on UK trading venues.

Transparency

For the purposes of calibrating the pre and post-trade transparency regime, Swiss shares that resume trading on UK trading venues will be treated as if they are being traded on a UK trading venue for the first time. An estimate will be made of the relevant parameters based on the characteristics of the shares to apply from their first day of trading. These estimates will then be updated after 6 weeks based on data from the first 4 weeks of trading in the UK. 

Tick sizes

The same logic as for transparency parameters will apply for tick sizes, with an initial estimate updated after 6 weeks by a calculation based on data for the first 4 weeks of trading in the UK. These figures may result in different tick sizes than currently apply for trading of these instruments on exchanges in Switzerland. UK trading venues will be allowed to use the minimum tick size that applies in Switzerland where that is smaller than the minimum tick size based on the figures for the average daily number of transactions (ADNTE) that we publish through our Financial Instruments Transparency System (FITRS).

Page updates

02/02/2021: Information added Update: 2 February 2021 – Trading of Swiss shares
16/12/2020: Document added New statement published
07/10/2020: Link changed Removed link to page about Brexit and MiFID transaction reporting (no longer published)