Response to ESMA Consultation Paper on the Review of the MiFID II Framework on Best Execution Reports

FESE, representing trading venues providing pre- and post-trade transparency, appreciates any efforts to improve transparency. It is crucial that the revision of the best execution reporting requirements set out in RTS 27 results in meaningful and informative reporting, enabling true comparability of execution quality between execution venues. Therefore, we support ESMA’s request to thoroughly overhaul the best execution reports which have proven to fail their purpose of providing market participants with useful and comparable best execution information. However, while we agree on overhauling the reports, we believe that ESMA should aim at striking the right balance between simplification and the inclusion of the relevant information, especially in terms of criteria and metrics. A simplification should not result in metrics that are inadequate to measure core best execution criteria such as implicit cost (spread) or other costs. The content of the reports should be meaningful and useful both for retail and institutional investors. Therefore, we believe that the redesigned reports should be easily accessible and fully harmonised and, where possible, the requirements between RTS 27 and RTS 28 aligned. We are also concerned that, without testing the requirement fully, the new reports would suffer from the same problems as the old ones.