[ESMA70-872942901-35 ] Q&A on MiFID II and MiFIR transparency topics

ESMA has published an updated version of its Q&As on MiFID and MiFIR related transparency topics. In this latest version, ESMA reflected the move of the Q&As to the Manual of post-trade transparency on 10 July 2023 (eventid=22062) [Section 2, Questions 4, 6, 8, 11, 13, Section 3, Questions 3, 4, 5, Section 4 Questions 1-7, 10, 11, 13, 15-25, Section 5 Questions 8 and (12 completely deleted), Section 8 Questions 1, 4 and Section 9 Questions 1 and 2], they also removed many references to the MiFIR transparency requirements and added the following Q&A 13 in section 5, Pre-trade transparency waivers, quote:
Question 13: Is it possible to execute cross orders in liquid non-equity instruments below the large in scale (LIS) thresholds on a trading venue?
Answer 13: The response clarifies that while MiFIR mandates pre-trade transparency for non-equity instruments, ESMA allows the crossing of orders under certain conditions, provided the trading venue ensures other market participants have a fair chance to interact competitively, including through a waiting period:
MiFIR requires that all orders in non-equity instruments are subject to pre-trade transparency unless the order benefits from a waiver from pre-trade transparency. However, ESMA considers it possible to cross orders (buy and sell orders from the same member or two members having prior knowledge of the orders) on a trading venue subject to certain conditions. In that respect, cross orders in liquid instruments below the LIS thresholds which are subject to pre-trade transparency and to which no pre-trade transparency waiver applies can be matched on a trading venue only when the venue ensures that other market participants are given a reasonable chance to interact in a competitive way with the crossing, including via a waiting period before matching. Trading venues shall set the parameters of the waiting period by taking into account the technological capacities to price the financial instrument concerned and route associated orders.