ESMA’s public statement

Article 27(3) of MiFID II requires execution venues to make reports related to the quality of execution of transactions on their venues available to the public free of charge at least once a year. These so-called RTS 27 reports are further specified in the Commission Delegated Regulation (EU) 2017/575 (RTS 27) regarding content and format.

According to the Directive amending MiFID II, which is part of the Capital Markets Recovery Package, the RTS 27 reports are rarely read, and investors and other market participants cannot make meaningful comparisons based on the information contained therein. For this reason, the amending Directive issues a temporary suspension to the above-mentioned periodic reporting obligation until 28 February 2023.

In addition, the European Commission’s legislative proposal on the MiFID II and MiFIR review from 25 November 2021 includes a proposal to delete the obligation to publish RTS 27 reports according to Article 27(3) of MiFID II. This proposal is currently being discussed in an ordinary legislative procedure by the Council of the European Union and the European Parliament.

Further steps after 28 February 2023

• Based on the available information, ESMA believes that the MiFID II and MiFIR legislative procedure is unlikely to be conducted by 28 February 2023 (i.e., by the expiration date of the temporary suspension of the RTS 27 reporting obligation). As a result, it is quite possible that the RTS 27 reporting obligation will have to be re-applied after 28 February 2023. However, ESMA expects only a temporary re-application until the entry into force of the revised MiFID II Directive.
• Furthermore, the issues identified in the amending Directive regarding RTS 27 reporting will continue to be relevant to all reports issued after 28 February 2023.
• ESMA is well aware that the re-application of the RTS 27 reporting obligation would require execution venues to commit significant resources to rebuild and maintain the reporting. If the reporting obligation were subsequently abolished within a short period of time, the additional effort would be particularly severe.
• In light of the above, from 1 March 2023 until the forthcoming legislative amendment on Article 27(3) applies, ESMA does not expect NCAs to take any priority supervisory actions with respect to execution venues regarding periodic reporting of information on the quality of execution of transactions on their venue.

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