17.III.4.2.3 Per-user pricing model

ESMA observed that under MiFID I pre- and post-trade data was in many cases charged based on the number of devices receiving data (a so-called per device model for the head count). Equity pre- and post-trade data was not always supplied directly from the source to end-users, but often purchased indirectly, for example, through data vendors (see also above: ‘scope’). In effect, end-users could pay more for the same data, depending on the devices receiving the data.1 To remedy the situation, ESMA proposed data to be sold on a ‘per-user pricing model’, instead of upon the devices receiving data.2

The responses to ESMA’s proposal were split. The largest data consumers saw the proposal as an effective step to reduce the costs of market data.3 Contrarily, the opponents, who included mostly RMs and MTFs, believed that the costs would outweigh the benefits. The proposal meant that, where the RMs and MTFs under MiFID I relied to a large extent on a few data vendors to bill and collect the fees of their end clients, under MiFID II RMs and MTFs would have to establish and maintain a direct relationship with each end client, increasing administrative costs.4 In the end, ESMA offered a compromise solution. ESMA’s proposed that a per-user model would be required, unless the regulated entity could demonstrate that there would be insufficient demand.5 The Commission adopted ESMA’s proposal, as reflected in the final MiFID II-text (see paragraph 3.3 above).