Markets in financial instruments regulation

 

SUMMARY OF:

Regulation (EU) No 600/2014 on markets in financial instruments

WHAT IS THE AIM OF THE REGULATION?

It updates earlier legislation on markets in financial instruments* to ensure that these:

It covers:

KEY POINTS

The legislation applies to:

Transparency rules:

Transaction rules require:

Trading in derivatives must:

Central counterparties must clear financial transactions in a non-discriminatory and transparent manner.

ESMA:

ESMA, the EBA and national authorities work closely together and have the power to temporarily ban or restrict the use of financial instruments considered a threat to investors or the financial system.

The Commission:

Coordinated by ESMA, national authorities monitor investment firms to ensure they act honestly, fairly and professionally.

FROM WHEN DOES THE REGULATION APPLY?

It has applied since 3 January 2018.

BACKGROUND

KEY TERMS

Financial instrument: asset, or evidence of ownership of an asset, or a contractual agreement between 2 parties to receive or deliver another financial instrument.
Derivative: a financial instrument whose value is based on the change in value of an underlying asset.
Clearing: the process used to manage the risk of open positions by checking that securities, cash or both are available.
Benchmarks: any publicly available rate, index or figure determined by a formula or value of underlying assets.
Trading venue: an official venue, such as multilateral trading facilities, organised trading facilities or regulated markets, where securities are exchanged.
Systematic internaliser: an investment firm that on an organised, frequent, systematic and substantial basis deals on its own account outside a regulated market.
Central counterparty: an entity acting as intermediary between trading counterparties and absorbing some of the settlement risk.

MAIN DOCUMENT

Regulation (EU) No 600/2014 of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Regulation (EU) No 648/2012 (OJ L 173, 12.6.2014, pp. 84-148)

Successive amendments to Regulation (EU) No 600/2014 have been incorporated into the original text. This consolidated version is of documentary value only.

RELATED DOCUMENTS

Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (recast) (OJ L 173, 12.6.2014, pp. 349-496)

See consolidated version.

Regulation (EU) No 648/2012 of the European Parliament and of the Council of 4 July 2012 on OTC derivatives, central counterparties and trade repositories (OJ L 201, 27.7.2012, pp. 1-59)

See consolidated version.

last update 18.03.2019