Second ESMA Public Statement on the Application of the MiFID II / MiFIR Review
Introduction
On 10 October 2025, the European Securities and Markets Authority (ESMA) issued a public statement on the application of certain provisions following the MiFID II / MiFIR review. This follows on from its previous public statement issued on 27 March 2024, and aims to provide practical guidance on the application of certain provisions deriving from the MiFID II / MiFIR review.
Commodity derivatives and derivatives on emission allowances
The MiFID II review extended the scope of position management requirements to trading venues which trade derivatives on emission allowances. It also introduced a new obligation to publish a second weekly position report for trading venues trading options. Both of these changes rely on Level 2 – with the existing RTS on position management controls needing to be amended to reflect the new scope, and ITS 4 being amended to reflect the new position reporting obligation.
ESMA noted that drafts of both sets of changes were delivered to the Commission in December 2024. However, both of these changes have been “de-prioritised” by the Commission, and hence adoption is not expected until 1 October 2027 at the very earliest (see our client note here on the EU Commission’s de-prioritisation). Whilst the Commission views these Level 2 changes as “non-essential”, the ESMA statement effectively encourages market participants to take into account the draft Level 2, stating:
- that it “expects” trading venues to take into account the position management controls in relation to derivative on emission allowances in the amending draft RTS; and
- ESMA is planning to go live with the amended position reporting and register for 1 April 2026.
ESMA, elsewhere in the statement, notes that for MiFID II derived provisions the relevant obligations apply when they are transposed into national law. The deadline for this for the MiFID II review changes was 29 September 2025 (although not all member states meet these implementation deadlines).
SI regime
The MiFID II / MiFIR review removed the quantitative tests for determining whether an investment firm qualifies as a systematic internaliser (SI), but left in place qualitative requirements for equity instruments and the possibility of “opting in” as an SI, still requiring notification in these circumstances. ESMA notes that it delivered the draft ITS on this notification to the EU Commission on 10 April 2025. Similar to the position management controls and position reporting changes above, this ITS has been “de-prioritised” by the Commission and hence is not expected to be adopted until 1 October 2027 at the earliest. ESMA suggests that in the meantime “investment firms are invited” to base their notifications on the template in the draft ITS.
Volume cap mechanism
One of the significant changes in the MiFIR review was replacing the “double volume cap” mechanism with the “single volume cap”. ESMA notes that since this regime has become operational with the publication of the first calculation results on 9 October 2025, it has updated its Q&As to align with the new single volume cap framework.
Revised rules on equity and non-equity transparency
Some of the most significant changes of the MiFIR review related to overhauls of the scope and approach of the transparency regimes for equities and non-equities. ESMA notes that the Commission Delegated Regulation amending RTS 1 and RTS 2 is mostly stated to apply from 2 March 2026 following its publication in the Official Journal of the EU (currently, it has been adopted by the Commission, but not yet published in the Official Journal). However, ESMA flags that two main provisions of RTS 1 start to apply 20 days after publication in the Official Journal:
- exclusion of give-up and give-in transactions from post-trade transparency when executed off venue; and
- new quoting obligations for systematic internalisers.
ESMA notes that it has published an announcement on the “standard market size” that will be relevant to these new quoting obligations.
ESMA states that while these amendments are still to be published in the Official Journal, it “invites” market participants to “anticipate the application of the MiFIR provisions” related to transparency for these instruments as of 2 March 2026.
Discontinuation of FITRS and DVCAP reporting flows
ESMA has stated that it plans to discontinue the reporting of volume cap data with 31 December 2025 being the last reporting day, and FITRS quantitative data on equity instruments, bonds, structured finance products and emissions allowances with 31 March 2026 being the last reporting day. This is in light of ESMA’s previous statement that it intends to discontinue these reporting flows and rely on transaction data already reported under MiFIR transaction reporting obligations.
Practical implications for firms
This ESMA public statement continues the multi-staged, and sometimes confusing, implementation of the MiFID II / MiFIR review, which has often involved Level 1 deadlines front-running Level 2 changes.
It is also an interesting example of the approach ESMA is now taking in the absence of certain Level 2 being adopted, given the EU Commission’s recent sweeping de-prioritisation of “non-essential” Level 2.
The approach of requesting that firms should use non-finalised Level 2 standards for the position management controls, position reporting and SI regime may put firms in the uncomfortable position of relying on informal guidance for compliance, in some cases seemingly contrary to Article 54(3) MiFIR which indicated existing Level 2 should remain in place until revised.
Firms should carefully consider their MiFID II / MiFIR review implementation plans in light of this statement.
