17.II.5 Concluding remarks

MiFID II aims to bring down data prices, especially in the area of equity post-trade data. One element of MiFID II’s strategy is to require RMs and MTFs to split (disaggregate) MiFID II equity pre- and post-trade data. MiFID II has therewith transformed elements of CESR’s formally non-binding guidance under MiFID I into formal law.

The MiFID II-rule requiring RMs and MTFs to split MiFID II equity pre- and post-trade data aims to strike a balance between data users and RMs/MTFs. On the one hand, data users benefit from not being required to buy both equity pre- and post-trade data as one product. On the other hand, MiFID II ‘only’ requires disaggregation at broader levels, such as asset classes and currency, rather than at the individual instrument-level. Although disaggregation at the individual instrument level would benefit data users the most, MiFID II chooses for broader disaggregation to ensure that RMs and MTFs do not face unreasonably high compliance costs.

The MiFID II-rules are top-down in nature. RMs and MTFs can under MiFID II no longer decide to only offer MiFID II equity pre- and post-trade data as one product (a single ‘package’). Despite the top-down nature, the intervention of MiFID II is limited. First, similar to CESR’s guidance under MiFID I, the scope of the MiFID II-rule for unbundling pre- and post-trade data excludes data vendors. It is questionable whether the approach of MiFID II will be sufficient, since one can question whether the benefits of disaggregation at the level of RMs and MTFs will be fully passed on to end-users. Second, MiFID II requires RMs and MTFs to disaggregate the data at relatively broad levels. Although all disaggregation-requirements are mandatory (no exceptions are in place), MiFID II does not go so far as requiring disaggregation at the individual instrument-level. Third, the MiFID II disaggregation rules only apply to MiFID II equity pre- and post-trade data (not: all equity pre- and post-trade data). Fourth, and finally, MiFID II still permits equity pre- and post-trade data to be sold as one product, as long as the MiFID II equity pre- and post-trade data is also available as separate products.

In sum, MiFID II introduces top-down elements in the area of data disaggregation, albeit in a limited way. The main question is whether the approach will be sufficient to reduce data prices compared to MiFID I. The success of MiFID II in this area also depends on another element, that is – the actual pricing of the separate products. Where the separate pre- and post-trade data products would both sold at a higher price than under MiFID I, data users would still face high (or even higher) data costs.1MiFID II aims to prevent this situation from happening by introducing two other elements in the area of pricing regulation, being: (1) a new provision of a reasonable commercial basis; and (2) the MiFID II requirement to make MiFID II equity pre- and post-trade data free of charge 15 minutes after publication. The MiFID II-rules for a reasonable commercial basis are examined below (section III). Thereafter, an examination of the MiFID II rules on making available free of charge data after 15 minutes will follow (section IV).