The European Securities and Markets Authority (ESMA) has published a press release to confirm that, effective from October, the EU will transition from the current double volume cap (DVC) mechanism to a single volume cap mechanism (VCM) as part of the Markets in Financial Instruments Regulation (MiFIR) Review. Under the new regime, trading under the reference price waiver will be capped at 7% of the total EU trading volume over the preceding 12 months for each equity and equity-like instrument. If this threshold is exceeded, trading venues must suspend the waiver for the affected instrument for three months, based on data published by ESMA under the new VCM webpage. To streamline compliance, VCM calculations will rely on transaction data collected by national competent authorities, and the DVC reporting system will be decommissioned in January 2026. ESMA has submitted amendments to the relevant regulatory technical standard, known as RTS 3, for adoption to reflect these changes, although the VCM transition will proceed regardless of the RTS 3 adoption timeline. ESMA advises interested parties to prepare for the new requirements, with the first publication of the VCM calculation results expected on 9 October.
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