Revocation of retained EU law Transitional amendments Amendments to the Markets in Financial Instruments Regulation (MiFIR) and the European Market Infrastructure Regulation (EMIR) Pre-trade transparency waiver regime
Articles 3 to 7 MiFIR concern transparency obligations in respect of trading in a wide range of equity and equity-like instruments, comprising shares, depositary receipts, ETFs, certificates and other similar financial instruments. Each of Articles 3 to 7 relates to obligations on market operators and investment firms operating a trading venue9. Of those Articles, the following concern transparency obligations imposed on those persons in a pre-trade context:
Article 3 (Pre-trade transparency requirements for trading venues in respect of shares, depositary receipts, ETFs, certificates and other similar financial instruments). Market operators and investment firms operating a trading venue must make public current bid and offer prices and the depth of trading interests at those prices.
Article 4 (Waivers for equity instruments). The FCA has the power to waive the obligation above in respect of certain types of orders or financial instruments. Article 4(1) MiFIR specifies a number of situations in which the FCA may waive the pre-trade transparency requirements in Article 3(1). These waivers include the Reference price (RP) and the Negotiated trade (NT) waivers. Article 4(5) enables the FCA to withdraw waivers if it considers that the way in which they are being used is inconsistent with the original purpose of the waiver or is circumventing the requirements of Article 4.
Article 5 (Volume cap mechanism). Article 5 introduces what is commonly known as the Double Volume Cap (DVC). The DVC imposes two quantitative constraints on the use of the RP and NT waivers in the trading of equity instruments on trading venues:
that trading on a single venue using those waivers be limited to 4% of the trading of that instrument on all trading venues across the ‘relevant area’ 10 ; and
that trading on all venues using those waivers be limited to 8% of the trading of that instrument on all trading venues across the relevant area.
	Temporarily, further to Article 5(3A) MiFIR, the requirement at Article 5(2) and (3) for the FCA to suspend use of the RP and NT waivers in the event the 4% and 8% caps are exceeded does not apply; instead the FCA has the discretion to suspend use of the RP or NT waivers for an initial period of six months to ensure that the use of the waivers does not harm price formation (Article 5(3B)).
	In respect of the waivers regime generally, the Act confers on the FCA the discretion to decide what the waivers should be and the conditions or limitations that should attach to them. In respect, specifically, of the DVC, the Act removes that mechanism and replaces it with an obligation on the FCA to monitor the level of ‘dark’ trading and a power to limit it where there is evidence that it is undermining the efficiency of the price formation process.