Recital 1

(1)Commission Delegated Regulation (EU) 2017/588 ² sets out the mandatory tick size regime for shares, depositary receipts and certain exchange-traded funds. In particular, under Delegated Regulation (EU) 2017/588 the minimum tick size applicable to shares and depositary receipts is calibrated on the basis of the average daily number of transactions on the most liquid trading venue in the Union. This metric is a good and simple liquidity indicator for the vast majority of those financial instruments. It is however not suited to shares that are admitted to trading or traded in the Union and a third country concurrently, where the trading venue with the highest turnover in those shares is located outside the Union. In that case, there is a risk that the mandatory tick size, determined on the basis of Union trading volumes alone, will be based only on a small subset of the overall trading volumes. It is therefore important that competent authorities are allowed to adjust the average daily number of transactions for such shares so as to reflect the overall liquidity profile of those shares. In order to alleviate constraints around data availability from third-country trading venues and allow for the possibility to use other public data, it is also important to provide competent authorities with sufficient flexibility as to the methodology used to take into account the liquidity available on those third-country trading venues.