ESMA has updated its manual on pre-trade and post-trade transparency under MiFID II and MiFIR. The manual gives more guidance on identifying OTC derivatives subject to transparency requirements and on the reference data to be provided, so that data in the consolidated tape is consistent. It also includes published Q&As and recommendations on the tick-size regime, including when trading venues and national authorities may step in. The guidance on reference data remains a draft until the related technical standards enter into force.

What it means: This is a technical but important step for anyone active in capital markets. Trade transparency, meaning the publication of prices and volumes, is a core tool of MiFID II, and the consolidated tape being set up in the EU will gather that data from every trading venue. For it to work, each OTC derivative must be identified the same way by all participants. The tick-size guidance affects how small price increments in shares can be, which bears directly on trading costs and liquidity. For Greece, the Athens Stock Exchange, now part of the Euronext group, as well as Greek investment firms and banks trading derivatives, should check whether their reporting systems fit the new guidance. Software companies building reporting tools for financial institutions also have reason to follow the changes, since their clients will need adjustments. Because part of the guidance counts as a draft until the technical standards apply, preparation should stay flexible so that final corrections are easy once the definitive texts are published. Firms should assign a single owner for transparency reporting so that updates from ESMA and the exchange are tracked in one place rather than spread across several teams.

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