When can a venue trade shares without pre-trade transparency?

Pre-trade transparency is the default, but Article 4(1) lets CySEC waive it for a venue's system in four cases. The reference price waiver covers systems that match orders at a price taken from another market: either the venue where the share was first admitted, or the most relevant market by liquidity. That price must be widely published and seen by market participants as reliable. The large-in-scale waiver covers orders that are large compared with normal market size. The order management facility waiver covers orders parked on the venue's facility until they are disclosed. The fourth waiver, for negotiated transactions, has three variants, explained below.

The reference price is the midpoint of the current bid and offer prices on the first-admission venue or the most relevant market. If that is not available, the opening or closing price of the relevant trading session is used, and only outside continuous trading (Article 4(2)). The exam material says that, when no current price is available, the midpoint of the closing bid and offer prices of the session is used. The Regulation has never used a closing midpoint: since MiFIR first applied on 3 January 2018, the fallback has been the opening or closing price of the session itself.

A negotiated transaction is agreed privately between the parties and then formalised under the venue's rules. The waiver is available in three cases: (i) the trade is made within the current volume-weighted spread shown on the venue's order book or in its market makers' quotes, which applies to liquid shares; (ii) the share has no liquid market and the trade is dealt within a percentage of a suitable reference price, set in advance by the system operator; or (iii) the trade is subject to conditions other than the prevailing market price of the share.

Negotiated trades within the current spread (type (i)) must be carried out under the venue's rules. For these trades the venue also needs arrangements to prevent and detect market abuse, as MAR Article 16 requires (see What is market manipulation, and how is it detected and reported?), and systems that detect attempts to use the waiver to get around other requirements. Such attempts are reported to CySEC. The exam material attaches these duties to all negotiated trades; since 3 January 2018 the Regulation has attached them only to type (i). The authority that granted a waiver of type (i) or (iii) monitors how it is used. The exam material says that "the Commission" monitors these waivers. Read that as CySEC, the Cyprus Securities and Exchange Commission: Article 4(3) has given this monitoring to the competent authority that granted the waiver, not to the European Commission, since 3 January 2018.

Before granting a waiver, CySEC notifies ESMA and the other competent authorities of each waiver it plans to grant and explains how it works. For a reference price waiver, the notice names the venue whose price is used. The notice must be given at least four months before the waiver is due to start. ESMA then has two months from receipt to issue a non-binding opinion on whether the waiver is compatible with MiFIR. If another authority disagrees with a waiver CySEC has granted, it may refer the matter to ESMA. ESMA monitors the use of all waivers and sends the European Commission a report every year.

CySEC may withdraw a waiver if it finds that the waiver is being used for something other than its original purpose, or to circumvent MiFIR's requirements. It may act on its own or when another competent authority asks. It notifies ESMA and the other authorities, giving full reasons. Separately, the reference price waiver is limited by the volume cap described in How does the volume cap limit dark trading under equity waivers? The 2024 review took the negotiated-trade waiver for liquid shares out of the cap. Until the single volume cap began operating, the old double cap still covered it. ESMA published the first single-cap results on 9 October 2025.