The Danish FSA has decided to allow deferral of publication of post trade information for bond transactions above the so-called size-specific to instrument threshold (SSTI). This is a consequence of new calculations from the European Securities and Markets Authority (ESMA) increasing the publication thresholds considerably.
The SSTI deferral supports the Danish banks’ voluntary agreement regarding post trade transparency for mortgage and corporate bonds. In the agreement, the threshold for publication for mortgage bonds is increased at the same time, so that in practice there will be more post-trade transparency than today.
The EU Regulation on markets in financial instruments (MiFIR) enables the Danish FSA to allow market participants certain deferrals in relation to the requirements for publication of trade information (eg. the price, quantity and venue of the trade) for, among other things, bonds.
Since MiFIR came into force on 3 January 2018, the Danish FSA has only allowed deferral of publication of covered and corporate bond transactions exceeding the so-called large in scale threshold. As from 1 June 2020, the Danish FSA will also allow deferral of publication of transactions above SSTI. SSTI is lower than LIS.
The decision is a reflection of the fact that the LIS thresholds increase considerably on 1 June, as they are determined annually based on the size of the transactions in the EU in the latest calendar year. Therefore, the new LIS thresholds measured in DKK will be significantly higher than the previous basis for the Danish FSA’s decision on allowing only deferral of transactions exceeding LIS.
The Danish FSA’s decision to allow SSTI deferral is based on the condition that the banks, in the present voluntary agreement for trade transparency for mortgage and corporate bonds, update the publication thresholds so that for mortgage bonds publication is effected immediately for transactions below DKK 120 million, whereas publication of transactions exceeding this amount may be postponed until 19.00 on the same day. This provides higher trade transparency than today with the present limit of DKK 112 million. For corporate bonds the original threshold from 2018 of DKK 20 million can be maintained.
In June 2017, following public consultation and a seminar, the Danish FSA decided which exemptions and deferrals should apply from 2018 for publication of order and trade information. The decision and the arguments for this were published in a memorandum.
The SSTI deferral reflects only new calculations from ESMA, and the arguments for the deferrals are therefore the same as described in the memorandum.
Please find a list of the allowed exemptions and deferrals of publication here (in Danish).