EU Equity pre- and post-trade transparency regulation (LBF vol. 21) 2021/12.III:12.III Consolidation of equity pre- and post-trade data

EU Equity pre- and post-trade transparency regulation (LBF vol. 21) 2021/12.III

12.III Consolidation of equity pre- and post-trade data

Documentgegevens:

mr. J.E.C. Gulyás, datum 01-02-2021

Datum: 01-02-2021
Auteur: mr. J.E.C. Gulyás
JCDI: JCDI:ADS266767:1
Vakgebied(en): Financieel recht / Bank- en effectenrecht
Financieel recht / Europees financieel recht
Financiële dienstverlening / Financieel toezicht

MiFID I did not mandate particular consolidation models of MiFID I pre- and post-trade data in order to establish a consolidated tape or consolidated quote.1 Instead, MiFID I recommended that the Member States would ‘remove any obstacles that could prevent the consolidation at the European level of the relevant information and its publication’.2 MiFID I provided no specific requirements on how and when to perform this task. MiFID I only gave support to data consolidation through the preconditions for consolidation examined above (see section II). In a Background Regulation Note, the Commission stated that MiFID I was designed to facilitate the development of market-led solutions that would achieve consolidation.3 Accordingly, consolidation services were a matter of market forces, as supported by some MiFID I preconditions.4

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The US experience was (and still is ) quite different. The US model covers a statutory mandate to integrate competing exchange and OTC markets into a national market structure. All US exchanges and associations that quote and trade exchange-listed securities need to provide their pre- and post-trade data to a centralised Securities Information Processor (SIP) for data consolidation and dissemination (see C.R.W. de Meijer, ‘MiFID II: Towards a consolidated Tape in Europe’, Journal of Securities Operations & Custody, 2011, volume 4, nr. 1, p. 44-45). For an examination of the US experience with consolidation, reference is made to chapter 13.

Recital 34 MiFID I.

Commission, Regulation Background Note, Draft Commission Regulation Implementing Directive 2004/39, January 2006, p. 11.

Examples of consolidation services under MiFID I included the Reuters Data Consolidation Service and Markit Boat. Reuters introduced a real-time consolidated data service that reported the best bid and offer for a share across all the platforms where it was traded. Markit Boat was designed to provide critical mass in the reporting of investment firms trading outside RMs and MTFs. For a further description, see R. Davies, ‘MiFID and a changing competitive landscape’, April 2008, p. 20 (available through: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1117232).