Report on exemptions for third-country central banks and other entities under the Markets in Financial Instruments Regulation (MiFIR)

The Regulation on Markets in Financial Instruments (MiFIR) and the Directive on Markets in Financial Instruments (MiFID 2) entered into force on 2 July 2014 and will be applicable as of 3 January 2018. MiFID 2/MiFIR introduce a market structure which aims to ensure that trading, wherever appropriate, takes place on regulated platforms and that trading is made transparent to ensure efficient and fair price formation.

In this framework, MiFIR grants an exemption from pre- and post-trade transparency requirements with regard to non-equity financial instruments that benefits regulated markets, market operators and investment firms in respect of a transaction where the counterparty is a member of the European System of Central Banks (ESCB) and where that transaction is entered into in performance of monetary, foreign exchange and financial stability policy which that member of the ESCB is legally empowered to pursue and where that member has given prior notification to its counterparty that the transaction is exempt. Moreover, MIFIR empowers the Commission to extend the scope of this exemption to third-country central banks where the prerequisite conditions are fulfilled.

For this purpose the European Commission commissioned an external study by the Centre for European Policy Studies (CEPS) and the University of Bologna on "Exemptions for third-country central banks and other entities under the Market Abuse Regulation (MAR) and the market in Financial Instrument Regulation (MiFIR)". The study is based on a survey and research and contains an analysis of the pre- and post-trade transparency rules that apply when third countries' central banks trade in securities, as well as the extent to which these central banks trade in securities within the Union.