RTS 9, referring to Regulatory Technical Standard 9 under Europe’s MiFID II framework, specifies detailed requirements for investment firms to publicly disclose pre-trade and post-trade transparency data for non-equity instruments. While MiFID II does not directly regulate all crypto assets, its transparency principles can inform best practices for institutional crypto markets.
Mechanism
For crypto-related instruments that fall under similar regulatory scrutiny or where firms adopt best practices, RTS 9’s mechanisms would entail publishing real-time bid-ask quotes, order sizes, and execution prices. This data is disseminated to the broader market through approved publication arrangements (APAs) or directly by trading venues. The goal is to provide market participants with a clear view of available liquidity and executed trades, enhancing overall market efficiency and fairness.
Methodology
The core principle behind RTS 9 is market transparency, designed to foster fair and efficient trading by ensuring comprehensive information access. In the crypto context, this methodology would involve adapting reporting standards to the unique characteristics of digital assets and derivatives. It could leverage distributed ledger technology to create immutable public records of trading activity and ensure the accuracy and timeliness of data dissemination, supporting robust price discovery and mitigating potential market abuse in institutional crypto trading environments.
MiFID II's OTR and tick size rules form an integrated system governing messaging efficiency and price stability, demanding a cohesive algorithmic and architectural response.
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