EU Equity pre- and post-trade transparency regulation (LBF vol. 21) 2021/17.IV.3:17.IV.3 Obligation

EU Equity pre- and post-trade transparency regulation (LBF vol. 21) 2021/17.IV.3

17.IV.3 Obligation

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MiFID II requires RMs, MTFs, APAs and CTPs to make MiFID II equity pre- and post-trade data free of charge 15 minutes after publication.1MiFID II does not cover details on this requirement (no Level 2 measures). In order to provide uniformity and legal certainty, ESMA has provided guidance through a formally non-binding Q&A. ESMA provides the following guidance:

First, ESMA clarifies what type of equity pre- and post-trade data needs to be made available free of charge 15 minutes after its publication. ESMA says that the equity pre- and post-trade data needs to replicate the data published on a reasonable commercial basis, but with a 15 minutes delay.2 RMs and MTFs are not required to make any further replication of already published free of charge data.3

Second, ESMA provides guidance on the public of the equity pre- and post-trade data. ESMA expects the data to be made available directly to end-users. Where RMs or MTFs make the equity pre- and post-trade data available via third parties (e.g. data vendors), this should not impose restrictions on access to that data to end-users.4

Third, and finally, ESMA highlights practices that it considers to be in violation with MiFID II. ESMA expects the equity pre- and post-trade data free of charge after 15 minutes to be made available: (a) in an easily accessible manner for all potential users by using a format that can be easily read, used and copied; and (b) in a non-discriminatory way. ESMA provides some examples when the conditions under points (a-b) are not satisfied.5 The examples of ESMA include, but are not limited to, the following practices:

1.

ESMA expects websites to be accessible to all interested parties in the data (‘everybody’);

2.

ESMA considers that publication of equity pre- and post-trade data through third parties (e.g. data vendors) that (a) do not charge specific fees for the relevant data, but (b) raise regular (for instance monthly or yearly) fees for subscribing to their services, does not meet the MiFID II requirement to make information available free of charge;6

3.

ESMA does not consider that publishing data as an image (i.e. in such a way that the user cannot copy the data in a format that can be read by a computer) meets the requirement of making MiFID II equity pre- and post-trade data available free of charge;7

4.

The ESMA guidance also concerns data that is deleted shortly after publication. ESMA is of the view that this practice is not permitted. ESMA expects that the information should be available for any party to initiate a retrieval of the data for a period of at least 24 hours from the publication;8

5.

ESMA does not consider that publication arrangements whereby market participants are required to submit search queries in order to access limited portions of the data (e.g. a search based on the International Securities Identification Number) meets the requirement of making data available free of charge.9 The aim here is to enable free data to be easily accessed.10 For other examples, reference is made to the ESMA Q&A.11

The ESMA guidance is a response to practices that emerged following the application of MiFID II. For example, certain data suppliers deleted equity pre- and post-trade data briefly after making the data free of charge after 15 minutes. ESMA wants to prevent such practices through the ESMA Q&A.12

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