The MiFID II and MiFIR Review package, developed by the European Commission (EC) and the European Securities Market Authority (ESMA) reflects the EU’s intent to modernise financial regulation and address gaps identified since the framework’s introduction a decade ago. The reforms aim to improve data standards, trade publishing and transparency to support fair and efficient markets. ESMA reaffirmed its focus with a release of a public statement on the transition period for adoption of review measures on 10 October 2025.
By GreySpark’s Declan Sharp, Consultant and Rachel Lindstrom, Head of Capital Markets Intelligence practice
Both amendments were adopted on 28 February 2024, entering into force a month later. The MiFID II amendment, as a directive, was required to be transposed into the national laws of EU member states by 29 September 2025. MiFIR amendment, as a regulation, became directly applicable but includes further provisions to be defined via Regulatory Technical Standards (RTS) proposed by ESMA. Not all RTS have been adopted, so firms must distinguish between what is already in force and what is forthcoming. Figure 1 illustrates the progression of the directive and regulation across 21 years.
2.0 Key Amendments to MiFID II & MiFIR
The MiFID II and MiFIR Review introduces significant structural and procedural changes to the European trading framework, with wide-reaching implications for investment firms, trading venues and data providers. This chapter outlines the revised definitions, transparency obligations and data standards designed to improve market efficiency, consistency and oversight across asset classes. Key developments include the redefinition of Systematic Internalisers (SIs), adjustments to pre- and post-trade transparency regimes and the introduction of the Designated Publishing Entity (DPE) model. Together, these reforms mark a pivotal shift toward a more harmonised and transparent European market structure.
Figure 1: Timeline of Key Dates in the MiFID and MiFIR
Source: GreySpark, European Paliament, EC, AFMEUS Federal Reserve
(Click image to enlarge)
2.1 Change to Systematic Internaliser Definition
The MiFID II Review changes the definition and obligations of SIs, moving from a quantitative to a qualitative test. As such, firms no longer need to calculate trading thresholds to determine SI status. Under the definition, SIs are firms that:
‘deal on own account in equity instruments by executing client orders outside a regulated market, an MTF or an OTF, without operating a multilateral system, or which opts in to the status of systematic internaliser’ on a systematic basis.
Firms may now opt in voluntarily for both equity and non-equity instruments. This benefits non-equity firms, as SIs are exempt from pre-trade transparency for non-equity instruments. ESMA will cease SI data calculations from 29 September 2025, and quarterly SI data publication has ended. ESMA released a draft SI application template in its Final Report on SIs, Transparency Calculations and Circuit Breakers. Though not adopted, ESMA’s recent public statement encourages firms and NCAs to use the draft template for SI notification or approval.
2.2 Pre-trade Transparency for Non-equity
The amended MiFIR removes mandatory pre-trade transparency for SIs in non-equity instruments, though firms may still publish quotes voluntarily to enhance visibility or meet client demand. The waiver for pre-trade transparency obligations above a “size specific to the instrument” (SSTI) for non-equities has been deleted, creating greater consistency across trading systems.
2.3 Pre-trade Transparency for Equity
Pre-trade transparency obligations for equity remain for investment firms, with refinements. Existing Reference Price Waiver (RPW) and Negotiated Trade Waiver (NTW) exemptions under Article 4 MiFIR remain. However, the volume cap waivers for pre-trade transparency obligations have been altered from the double volume cap (DVC) to a single volume cap (SVC) of 7% of EU-wide trading volume as per amended Article 5 MiFIR, effective 29 September 2025. This is aimed at limiting ‘dark trading’ when waivers inhibit trade transparency. As a result, EMSA is discontinuing firm DVC reporting (DVCAP) by firms on 31 December 2025. ESMA published its first SVC data on 07 October 2025.
Pre-trade transparency waivers have been adjusted. Only venues operating Central Limit Order Books (CLOB) and periodic auction systems must provide pre-trade transparency; voice and RFQ systems are exempt. Transparency is still required for package orders, though waivers may apply to individual components. Previously, SIs were required to publish firm quotes for client orders up to the Standard Market Size (SMS) and were exempt from this obligation for trades of a larger size. The SMS were determined annually by ESMA under RTS 1. Following the MiFIR Review, the threshold has been amended to twice the SMS. The Final Report on Equity Transparency (RTS 1) did not propose to raise this threshold. RTS 1 provisions, including new quoting obligations and transparency thresholds, will be published soon in the Official Journal as per a recent announcement and take effect on 02 March 2026. Firms need to keep up to date on reforms and calculations to prepare for that change.
2.4 Data Standards
Data standards now support the Consolidated Tape (CT) across asset classes. The “reasonable commercial basis” requirement under Article 13 MiFIR now applies to Consolidated Tape Providers (CTPs), Approved Publication Arrangements (APAs) and SIs. Data contributors must provide data to CT providers per Article 22a of amended MiFIR. Under amended MiFID II, firms are no longer required to publish RTS 28 best execution reports, which ESMA found had limited investor value. No changes were made to RTS 23 (reference data) as confirmed in June 2025.
2.5 Order Execution
The MiFIR amendments enhanced best execution obligation and data-sharing with the CTP for SIs. Tick-size and mid-point matching rules have been relaxed; SIs may match orders of any size at the mid-point. Quotes outside tick-size bands remain unchanged. ESMA’s April 2025 Final Report includes draft RTS on execution policy, venue selection and monitoring, and it is pending EC adoption. Firms should begin reviewing internal policies to prepare for compliance.
2.6 Post-trade Transparency
Under the amended MiFIR, reference data must now be reported for all instruments admitted to trading, trading on a venue, approved by the issuer or requested for admission. Equity post-trade transparency requirements remain unchanged. Deferred publication for OTC derivatives follows the new Article 11a MiFIR. For other non-equities, amended Articles 10 and 11 of MiFIR outline the post-trade transparency regime, but the amended RTS on trade transparency has been adopted by the Commission, but is not yet in force.
GreySpark Partners has already analysed the deferral regime and CT for bonds. Ediphy has been appointed as the bond CTP, with equity and derivatives providers to follow. Firms may face higher exposure to market risk for medium and large-sized trades due to shorter deferral periods and could lead to some types of bonds being harder to trade out. System and reporting processes will need to be updated to capture the revised publication rules and waiver conditions, with resource planning for near to medium term implementation.
ESMA launched a Call for Evidence to support a review of transaction reporting under MiFIR, EMIR and SFTR in June 2025. The public statement on 10 October 2025, confirmed that Financial Instrument Transparency System Reporting (FITRS) will cease on 31 March 2026. ESMA confirmed the current FITRS requirements will ‘remain unchanged in the interim’ and stated that it intends to ‘rely on reporting flows under Article 26 of MiFIR’ going forward.
2.7 Designated Publishing Entity Under the New MiFIR
Post-trade transparency responsibilities will shift from SI status on DPE status of firms. Previously, only SIs had to report OTC trades, which encouraged some firms to opt for SI status to handle ‘reporting for clients without dealing on their own account on a systematic basis’, creating disproportionate obligations on such firms. The DPE regime aims to fix this by creating a legal classification for publishing trade information apart from the SI classification. Investment firms may apply for DPE status for specific ‘classes of financial instruments’, and ESMA has recently established a DPE Registry. The UK has similarly introduced a Designated Reporter (DR) regime, assigning publishing obligations on such entities and not SIs. Unlike the EU’s approach, the UK DR designation applies to the entire entity rather than being limited to specific asset classes. Financial Instruments Reference Data System (FIRDS) reporting, as per Article 27 MiFIR, will now be the responsibility of DPEs for OTC transactions, while venues remain responsible such data for on-venue trades.
A DPE assumes the responsibility to make post-trade information public ‘through an APA in accordance with Article 20(1) or Article 21(1)’ MiFIR. Unlike APAs, which are technical platforms, DPEs are legally accountable for publication. Reporting responsibility will be as follows: if one D PE is involved, it must publish the trade; but, if two or no D PEs are involved, the selling party must publish. The post-trade price, volume and time data publishing waterfall generally will be as shown in Figure 2, with further detail provided in the newly updated post-trade manual¹.
1: The manual provides more detail for publishing and reporting waterfalls for different asset classes. This is a simplified version. DPEs will often only be reporting OTC derivatives as most equities are reported on venue, certain sovereign bonds and completely OTC bonds (debt instruments that are not admitted to any trading venue) do not have publication obligations.
Figure 2: MiFID II and MiFIR Review Reporting Responsibility Decision Tree.
Source: GreySpark analysis
(Click image to enlarge)
3.0 Where the Market Goes From Here
Under the new MiFIR, Payment for Order Flow (PFOF) is prohibited, from the 28 March 2024, altering the broker and dealer market for securities in the EU. PFOF prohibition will explicitly, directly impact the business of investment banks, brokers and non-bank market makers. EU banks and others will have to work with their technology and compliance teams to ensure best execution methods are up to scratch for the new regime. Exchange and market operator, Euronext strongly endorsed the ban because of the potential upside in the protection of retail investors and overall market efficiency. The ban is effective in most member states, except Germany, which extended its transition period to 30 June 2026 due to market impact. This is because 60% of retail equity market maker revenue comes from PFOF according to the Deutsche Bundesbank. The UK² effectively banned PFOF in 2012 and studies thereafter have shown a considerable improvement in the proportion of retail-sized trades executed at best quoted prices from 65% of retail trades to 90% of retail trades. By contrast, PFOF is still legal in the US and the CFA Policy Institute argued that it benefits market makers to the detriment of retail investors, who may not receive best execution.
A key concern for firms is that many Regulatory Technical Standards (RTS) proposed by ESMA over the past year have not been adopted within the usual three-month timeline. The 10 October 2025 public statement is therefore a welcome update. Firms must st ay informed and prepare for the adoption of these RTS, as they will shape compliance obligations and market practices.
2: The UK was still a member of the EU at the time, but the FSA (predecessor to the FCA) exercised its member state regulatory powers to show that PFOF breached its existing rules on inducements, best execution and conflicts of interest.
