ESMA eases MiFID II best execution reporting requirements

ESMA tells national authorities not to prioritise supervisory action for RTS 27 and RTS 28 reporting under MiFID II amid ongoing coronavirus pandemic. 

EU authorities have moved to ease major reporting requirements under MiFID II as firms continue to battle the impact of the coronavirus pandemic across Europe.

The European Securities and Markets Authority (ESMA) confirmed in a statement that national regulators have been informed not to prioritise supervisory action against execution venues and firms with regards to deadlines for RTS 27 and RTS 28 reporting under MiFID II.

For execution venues, quarterly RTS 27 reports were due to be published on 31 March, while RTS 28 reports from firms were expected to be published on 30 April. ESMA has now said that the RTS 27 and RTS 28 reports should be published as soon as possible, but no later than 30 June.  

“ESMA recognises that, considering the exceptional circumstances created by the COVID-19 outbreak, execution venues and firms may need to deprioritise efforts for the publication of these general reports concerning 2019,” ESMA said.

MiFID II RTS 27 requires firms to report quarterly data on more than 50 variables that impact the quality of their trade execution, including price, cost, speed of execution and settlement, size and the nature of orders. At the same time, RTS 28 requires firm to report on their five most-used trading venues for each asset class.

ESMA added that firms and execution venues must keep records of the decisions taken in relation to the delay in reporting, and reiterated that core obligations around best execution for clients remain firmly in place despite the market volatility.

MiFID II RTS 27 and RTS 28 reporting requirements proved controversial among market participants as they came into force in January 2018. A survey published late last year found that the majority of firms are not systematically monitoring processes for best execution, with more than half stating they are also not reviewing RTS 28 data.   

“ESMA and competent authorities are aware of difficulties encountered by execution venues and firms in preparing these reports due to the COVID-19 pandemic and the related actions taken by the Member States to prevent contagion,” ESMA added.