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1.OverviewReasons for publication1. On 20 October 2011, the Commission adopted two legislative proposals, a directive and a regulation,for the review of MiFID I. The review is an important and integral part of the reforms adopted at EUlevel in order to establish a safer, sounder, more transparent and more responsible financial systemand to strengthen integration, efficiency and competitiveness of EU financial markets.2. On 14 January 2014, the European Parliament and the Council reached political agreement on acompromise text.3. The final legislative texts of the new Markets in Financial Instruments Directive (MiFID II) and theMarkets in Financial Instruments Regulation (MiFIR) were approved by the European Parliament on15 April 2014 and by the European Council on 13 May 2014. They will enter into force on the twentiethday following their publication in the Official Journal of the European Union (estimated in June2014).4. MiFID II and MiFIR require ESMA to develop draft Regulatory Technical Standards (RTS) andImplementing Technical Standards (ITS) in several areas for submission to the Commission by, respectively,12 and 18 months from entry into force of the Directive and the Regulation.5. According to Articles 10 and 15 of Regulation (EU) No. 1095/2010 of the European Parliament and ofthe Council establishing ESMA (ESMA Regulation), ESMA must conduct a public consultation beforesubmitting draft RTS and ITS to the Commission.6. This Discussion Paper (DP) therefore seeks stakeholders’ views on key elements of future ESMAtechnical standards. On the basis of responses and feedback received, ESMA will prepare a subsequentConsultation Paper that will include the draft technical standards for submission to the Commission.Respondents to this consultation are encouraged to provide the relevant information to supporttheir arguments or proposals.Background7. MiFID 1 is a cornerstone of the regulation of financial markets in the European Union (EU). It regulates,inter alia, the authorisation and the supervision of investment firms, the requirements for theprovision of investment services and activities, the authorisation and supervision of trading venuesand the requirements for trading activities of financial instruments across the EU.8. The directive was implemented through a Commission Implementing Directive for organisationalrequirements and operating conditions for investment firms, and defined terms for the purpose ofMiFID 2 ; and a Commission Regulation for record-keeping obligations for investment firms, transactionreporting, market transparency, admission of financial instruments to trading, and defined terms1Directive 2004/39/EC of the European Parliament and the Council (also referred to in this document as MiFID I).2Commission Directive 2006/73/EC (also referred to in this document as the MiFID Implementing Directive).12