3 February 2025: DPE regime becomes fully operational

Changes

Article 21a of MiFIR provides that:

• Member State competent authorities (NCAs) shall grant investment firms DPE status for specific classes of financial instrument, upon the request of the investment firm. NCAs shall communicate the request to the European Securities and Markets Authority (ESMA). 
• Where only one party to a transaction is a DPE that party will be responsible for making transactions public through an APA. 
• Where neither of the parties to a transaction, or both of the parties to a transaction, are DPEs, only the entity that sells the financial instrument concerned shall be responsible for making the transaction public through an APA.
• ESMA shall by 29 September 2024 establish and shall regularly update a register of all DPEs, specifying their identity and the classes of financial instrument for which they are DPEs. ESMA shall publish that register on its website.

Timing

The changes that Regulation (EU) 2024/791 introduced entered into force on 28 March 2024. Whilst the Regulation did not provide for a transitional provision for the application of the DPE regime ESMA subsequently issued a statement on 22 July 2024 stating that it had agreed with NCAs to adopt a two-step approach:

• ESMA’s DPE register, published on 29 September 2024.
• The new DPE regime, fully operational on 3 February 2025.

The statement added that, ESMA expects that as of 3 February 2025, registered DPEs, which are party to a transaction, will make the transaction public through an APA. Until further notice the previous regime, relying on SIs, should continue applying but ESMA expects that it will no longer be used.

Registration as a DPE

In its statement ESMA encouraged investment firms intending to become DPEs to register with their NCA and on various NCA websites pages appeared setting out the registration procedure. A list of these web pages is set out below. When applying to an NCA, NCAs have, per ESMA’s statement, identified the classes of financial instruments for which they wish to take up the function and this information has also been transmitted to ESMA. A valid Legal Entity Identifier Code (LEI) is also required for entry in the ESMA register. 

Classes of financial instruments to be included in the DPE register:

ESMA register

ESMA has also established the register. The DPE register has initially been made available on ESMA’s website in XLSX format and should allow market participants to prepare for the effective start of application of the DPE regime. The XLSX register will be updated regularly. At the same time, ESMA is working on integrating the register in its IT systems so that it can be accessed on a dedicated portal similarly to other registers of entities (e.g. SI register). Indicatively, the go-live of the DPE register integrated into the ESMA’s IT systems, and hence the discontinuation of the XLSX version, is planned for the end of 2025. Following the integration into the IT systems, the ESMA register will be automatically updated with new information as soon as the respective modifications are introduced in the register by the NCA.

NCA DPE pages

At the time of writing certain NCAs had published a link on their website regarding applying for DPE status. This includes the BaFin in Germany and the AFM in the Netherlands. Other NCAs like the AMF in France have so far not published a link although this is expected to change so prospective applicants should keep a close eye on developments.

Discontinuation of SI quarterly calculations

On 24 January 2025, ESMA issued a new web page reminding market participants that responsibility for reporting OTC transactions will shift from SIs to DPEs from 3 February 2025.

ESMA also stated that it will no longer be necessary for it to perform SI calculations from September 2025 and therefore it has decided to discontinue the voluntary publication of quarterly SI calculations data. This action will also reduce the administrative burden for investment firms.

Consequently, the mandatory SI regime will no longer apply from 1 February 2025, and investment firms will not need to perform the SI-test. However, investment firms can continue to opt into the SI-regime.

UK regime

As part of the UK Wholesale Markets Review, the UK introduced a Designated Reporter Regime (DRR) which came into force in April 2024 and removes SI status as a criterion in establishing when an investment firm is obliged to report a transaction. The DRR provides that investment firms may elect to register themselves as a designated reporter (DR), regardless of SI status, by registering with the Financial Conduct Authority (FCA). Among other things when registering investment firms should provide:

• The name of the individual authorised to make the request, if different from sender.
• The requestor’s FCA issued reference number. 
• The name of the firm that wishes to register.
• The firm’s 20-character LEI.
• An indication if registering an authorised third country firm in relation to its UK branch.

Registration, which applies at the entity level, means that DR status applies to all of the investment firm’s reportable trades across all financial instruments. Where a DR is trading with a non-DR, the DR would be responsible for reporting all trades. The seller would report where both, or neither, of the counterparties are a DR.

Next steps for firms

We have assisted a number of firms with regard their post trade transparency requirements including registration as a DPE and/or DR. For further information please contact one of the authors of this note or your usual Norton Rose Fulbright contact.