ESMA’s new rulings also cover the Central Securities Depositaries Regulation (CSDR).
“The new technical standards will alter the functioning of European financial markets by increasing their transparency, safety and resilience as well as investor protection,” ESMA said in a statement.
The rules will bring the majority of non-equity financial products across the EU into a new regulatory regime and will move a significant part of current over-the-counter trading onto regulated platforms.
The standards clampdown in the trading of equities in so called “dark pools” making it a formal requirement for shares and certain derivatives to be traded only on regulated platforms. They also provide new liquidity assessment rules for non-equity instruments such as fixed income securities to improve pricing transparency.
Finance companies have until 3 January 2017 to implement the new Markets in Financial Instruments Directive (MiFID II), a timetable which some have expressed concern about.
Under the new MAR standards, ESMA has sought to increase investor protection by introducing specific arrangements on how to present investment recommendations or other information recommending or suggesting an investment strategy.
“The rules put out by ESMA… on MiFID II, MAR and CSDR will notably change the way Europe’s secondary markets function,” said Steven Maijoor, who chairs the authority which is charged with safeguarding the stability of the European Union’s financial system.
“This will no doubt impact market participants and regulators alike,” he said.
ESMA’s new technical standards still have to be approved by the European Commission. Once endorsed, both the European Parliament and the Council have an objection period.
After CSDR, which entered into force back in 2014, MAR and MiFID II will enter into force in 2016 and 2017 respectively.