18.IV.3.3.2 MiFID II Review

Experience with MiFID II so far suggests that the current MiFID II strategy requires a careful re-examination. ESMA observes that so far MiFID II has overall not delivered on its objective to reduce the prices of (i.e. improve access to) market data. On the one hand, ESMA acknowledges that there is a growing demand for market data due to (1) fragmentation and (2) technological innovation (e.g. algorithmic trading resulting in more data consumption). ESMA also recognises that data sellers (e.g. RMs, MTFs, and APAs) need to make investments to keep up with such a fast-changing environment. That being said, the ESMA recommendations are overall more beneficial for data users. Examples of the ESMA recommendations include, among other things, data to be produced at ‘the cost of data production’ (instead of a ‘reasonable margin’), harmonisation of certain terms and conditions, as well as stricter enforcement of the applicable rules. The ball currently lies in the Commission’s court. Whatever the outcome will be, ESMA – as well as several data users – show willingness to introduce stricter and more EU regulation for equity pre- and post-trade data prices. The result would be an EU strategy (a) with more focus on protecting data users, whilst (b) leaving less freedom for data sellers.