Areas covered in this issue:

1 MIFID II - European Developments

2. European Markets Infrastructure Regulation ("EMIR")

3 Securitisation Regulation

4 Benchmark Regulation

5 European Securities and Markets Authority ("ESMA")

6 International Organisation of Securities Commissions ("IOSCO")

7 Market Abuse Regulation ("MAR")

8 Prospectus Regulation

9 Central Bank of Ireland

10 Anti - Money Laundering ("AML") / Counter - Terrorist Financing ("CTF")

11 Data Protection / General Data Protection Regulation ("GDPR") / Cyber Security

12 Brexit

13 Sustainable Finance

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1.1 ESMA Opinion clarifies application of pre-trade transparency and price determination in frequent batch auctions

On 4 October 2019, the European Securities and Markets Authority ("ESMA") published an opinion on the application of frequent batch auctions ("FBAs") and the double volume cap ("DVC") mechanism (the "Opinion").

By way of background, FBAs are a type of periodic auction trading system for equity instruments under the MiFID II Directive (2014/65/EU) ("MiFID II Directive") and the Markets in Financial Instruments Regulation (600/2014) ("MiFIR"). The Opinion reflects the conclusions set out in the ESMA Report on periodic auctions published in June 2019, which identified several shortcomings in the FBA system in the area of pre-trade transparency and price determination.

ESMA clarifies in the Opinion that when a trading venue is operating a FBA system and it begins the auction process, as soon as a potential match has been identified, the pre-trade transparency requirements will apply. The Opinion also sets out examples of several practices which may undermine the price formation process and details three functionalities which would result in non-price forming FBA systems. ESMA have provided that it will monitor developments in the market, including how trading venues adapt their systems to meet the guidance on the operation of FBA systems. The European body in an accompanying press release provided that it will issue further guidance in order to ensure the consistent application of the MiFID II / MiFIR requirements across the European Union (the "EU") with particular focus on transparency and price formation.

A copy of the Opinion and press release can be accessed here and here.

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