ESMA has opened a public consultation on draft regulatory technical standards (RTS) regarding the treatment of package orders under the amended MiFID II/MIFIR. Asset class-specific criteria have been developed for a few classes, including credit derivatives.

MIFIR's pre-trade transparency regime requires that trading interest in all non-equity instruments is disclosed, with certain exceptions if there is not a liquid market for the package order as a whole. ESMA's draft RTS establishes a methodology for determining package orders for which there is a liquid market in the EU.

ESMA says its methodology is based on qualitative criteria allowing it to take the characteristics of packages into account which are standardised and frequently traded. Based on this, orders that meet certain criteria, or are from specific asset classes - including credit derivatives - are subject.

Package transactions are interlinked financial transactions comprising various instruments which firms execute jointly in order to reduce transaction costs and for risk management purposes. ESMA is seeking input to its draft RTS by 3 January 2017. Standards will be finalised by February 2017, and the MiFID II regime will enter into force on 3 January 2018.