The European Securities and Markets Authority, the European Supervisory Authority that sets rules for securities, has published two reports on the effectiveness of the European Union's Markets in Financial Instruments Regulation and is suggesting some tweaks to the regime that it has set up.

The super-regulator's report on the 'transparency' (i.e. firms' disclosures of data to the market) regime for equity instruments has led it to make the following suggestions.

• Regarding pre-trade transparency regimes that apply to trading venues, ESMA proposes to restrict the use of the reference price waiver to larger orders.
• Regarding the systematic internaliser regime, ESMA wants to increase the minimum quoting obligations and revise the methodology for determining the standard market sizes relevant for the quoting by internalisers.
• Regarding the double-volume cap mechanism, it wants to simplify the regime and transform the mechanism into a single-volume cap with the deletion of the trading venue threshold of 4%. It also wants to lower the EU level threshold.
• Regarding the share trading obligation, it wants to make the rules clearer about the scope of the trading obligation, specifically in relation to shares from countries outside the EU.

The ESA's report on the pre-trade 'transparency' obligations applicable to systematic internalisers in non-equity instruments has led it to suggest the following.

On the qualitative assessment of Article 18 MiFIR, it wants to maintain the publication of the quotes in liquid instruments while deleting existing requirements to provide quotes to other clients and to conclude transactions with more than one client. It wants to remove an 'obligation' - presumably one that systematic internalisers must fulfil - in relation to illiquid instruments (most non-equity instruments are illiquid) and it wants to standardise the way in which systematic internalisers publish their quotes in equity and non-equity instruments. It wants to make no change to the quantitative monitoring mandate.

ESMA chairman Steven Maijoor, who has been at his post since ESMA's inception in 2011 and will step down on 31 March next year, has argued: “The reports shed light on existing limitations to transparency. The proposals aim to simplify the transparency regime and increase transparency available to market participants.”