[Newsflash n. 35]
On 14 July 2017 Borsa Italiana published a draft set of amendments to its Market Rules and relevant Instructions to take into account the application of certain MiFID II provisions, including in particular the replacement of the SeDeX regulated market with a corresponding MTF.
In Borsa Italiana’s view, the broad definition of “derivative instrument” referred to in Article 29 of Regulation (EU) no. 600/2014 (“MiFIR”) extends the clearing obligation set out by the same Article also to the securitised derivative instruments currently traded on the SeDeX market.
As a consequence, considering that the introduction of such clearing obligation would make the trading of products on SeDeX uneconomical (because of increased technical and operational requirements for firms), Borsa Italiana has determined to close the regulated market SeDeX. At the same time, in order to allow the continuation of trading of securitised derivatives in its market, the Stock Exchange intends to create a new Multilateral Trading Facility that, although presenting the same characteristics (issuers’ obligations, secondary market, etc.), will not fall within the scope of Article 29 of MiFIR. The switch between the regulated market and the MTF will therefore have no impact on the pricing of financial instruments that will be automatically readmitted to the system.
Borsa Italiana takes the chance to remind market players that MTFs like regulated markets are now subject to the Market Abuse Regulation. The Stock Exchange also specifies that, even if such markets are, in principle, excluded from application of the Transparency Directive, the issuers would still be required to publish their certified audits after admission.
In principle, the envisaged change may offer a good opportunity for the exchange to simplify the listing process in terms of timing and documentation requirements and reduce the cost of trading securitised derivatives. The proposed amendments would hopefully take this into account in the final version of the revised Market Rules.
In addition to the above, Borsa Italiana is also considering the following changes to its Market Rules:
- The new categorisation of the intermediaries admitted to Borsa Italiana’s markets and the implementation of the relevant organizational requirements and rules of conduct;
- The introduction of specific contracts between Borsa Italiana and the intermediaries acting as market maker (Market Making Agreements) and the harmonisation of the existing contracts to the new rules;
- The definition of additional information that will be required as minimum content for orders and the introduction of some supplementary transparency measures.
Legália will monitor future developments on these topics and is available to provide you with any clarification or support in their respect.
Contacts:
Vito Vittore
Senior Partner
Elena Pagnoni
Of counsel
Luigi Bonifacio
Associate
Chiara Calzecchi Onesti
Associate
