Schedule 2: Transitional amendments Part 1 – Amendments to the Markets in Financial Instruments Regulation Paragraph 7: Transparency requirements for fixed income instruments and derivatives etc
This paragraph of the Schedule substitutes Articles 8 to 11 (Pre-trade transparency requirements for trading venues in respect of bonds, structured finance products, emission allowances and derivatives; Waivers for non-equity instruments; Post-trade transparency requirements for trading venues in respect of bonds, structured finance products, emission allowances and derivatives; and, Authorisation of deferred publication) of MiFIR.
	Paragraph 1 of new Article 8 requires the FCA to make rules imposing pre-trade transparency requirements on trading venues where the FCA determines that relevant non-equity instruments should attract such requirements. The purpose of imposing requirements must be to aid price formation and to allow for the fair evaluation of financial assets.
	Paragraph 2 of Article 8 limits the rule-making power outlined in paragraph (1) to circumstances where the FCA considers its use is necessary or expedient for advancing at least one of the FCA’s operational objectives as set out in section 1B(3) of FSMA 2000.
	Paragraph 3 of Article 8 also requires the FCA to consider the impact on market liquidity when setting pre-trade transparency requirements for fixed income and derivatives trading using the power outlined in paragraph 1. This is to avoid the efficient functioning of markets being negatively impacted through reduced liquidity.
	Paragraph 4 of Article 8 provides examples of the sorts of requirements the FCA could impose using this power.
	Paragraph 5 of Article 8 clarifies that when making rules using the power in paragraph 1 the FCA can set different requirements for different types of trading systems and instruments. For example, the FCA could limit pre-trade transparency requirements to systems that already operate based on broad transparency, such as order books in respect of derivative transactions.
	Paragraph 6 of Article 8 makes provision about the instruments and persons that are in scope of this power.
	Paragraph 1 of new Article 9 gives the FCA the power to include provision for waivers in respect of the pre-trade transparency requirements it imposes through rule-making power in Article 8.
	Paragraph 2 of Article 9 gives the FCA the power to decide what, if any, conditions should be applied to any waiver.
	Paragraph 3 of Article 9 gives the FCA the ability to withdraw a waiver from a relevant person if they are using it in a way that deviates from its original purpose or to avoid complying with regulation. The FCA must give the relevant person a notice to withdraw the waiver.
	Paragraph 4 of Article 9 gives the FCA the power to suspend requirements in pre-trade transparency rules for an instrument or class of instruments. The power is exercisable by notice.
	Paragraph 5 of Article 9 obliges the FCA to include specific information in such notices and imposes requirements about the manner of their publication.
	Paragraph 6 of Article 9 limits the FCA’s power to suspend pre-trade requirements to instances where it considers that it is necessary to do so to advance its integrity objective, as set out in section 1D of FSMA 2000.
	Paragraph 7 of Article 9 specifies that when suspending pre-trade transparency requirements, the FCA should also have regard to its consumer protection objective and competition objective, as set out in sections 1C and 1E of FSMA 2000 respectively.
	Paragraph 1 of new Article 10 requires the FCA to make rules imposing post-trade transparency requirements on trading venues where the FCA determines that relevant non-equity instruments should attract such requirements. The purpose of imposing requirements must be to aid price formation and to allow for the fair evaluation of financial assets.
	Paragraph 2 of Article 10 limits the rule-making power for post-trade transparency, outlined in paragraph (1) to circumstances where the FCA considers its use is necessary or expedient for advancing at least one of the FCA’s operational objectives as set out in section 1B(3) of FSMA 2000.
	Paragraph 3 of Article 10 requires the FCA to consider the impact on market liquidity, when setting post-trade requirements using the power outlined in paragraph 1. This is to avoid the efficient functioning of markets being negatively impacted through reduced liquidity.
	Paragraph 4 of Article 10 provides examples of the sorts of requirements the FCA could impose using this power.
	Paragraph 5 of Article 10 clarifies that when making post-trade transparency requirements using the rule-making power in paragraph 1 the FCA can set different requirements for different types of trading systems and instruments.
	Paragraph 6 of Article 10 makes provision about the instruments and persons that are in scope of this power.
	Paragraph 1 of new Article 11 gives the FCA the power to include provision for deferrals in respect of post-trade transparency requirements it imposes through the rule-making power in Article 10.
	Paragraph 2 of Article 11 gives the FCA the power to suspend requirements in post-trade transparency rules for an instrument or class of instruments. The power is exercisable by notice.
	Paragraph 3 of Article 11 obliges the FCA to include certain things in such notices and imposes requirements about the manner of their publication.
	Paragraph 4 of Article 11 limits the FCA’s power to suspend post-trade requirements to instances where it considers that it is necessary to do so to advance its integrity objective, as set out in section 1D of FSMA 2000.
	Paragraph 5 of Article 11 specifies that when suspending post-trade transparency requirements, the FCA should also have regard to its consumer protection objective and competition objective, as set out in sections 1C and 1E of FSMA 2000 respectively.