17.III.5 Concluding remarks

In contrast to the previous regime (MiFID I), MiFID II specifies what constitutes a reasonable commercial basis. MiFID II transforms the standard of a reasonable commercial basis into a concept (genus) that consists out of several sub-elements (species). The sub-elements are: (1) the provision of data on the basis of costs; (2) charging at the level of disaggregated data; (3) a per-user pricing model; (4) the unbundling of data from other services; (5) a non-discriminatory basis; and (6) disclosure of the price levels of the data. The specification of a reasonable commercial basis are identical for all MiFID II Data Suppliers (RMs, MTFs, SIs, APAs, and CTPs). The concept of a reasonable commercial basis, including its sub-elements, do not apply to data vendors.

Sub-elements 1-2 can be considered as the core of the reasonable commercial basis-concept. This is because sub-elements 1-2 touch upon the actual pricing of the data. The first sub-element of a reasonable commercial basis requires MiFID II Data Suppliers to price MiFID II data on the basis of production and dissemination costs. The pricing-rules apply at the level of the disaggregated data (sub-element 2) to ensure that each individual data product is available on a production and dissemination cost-basis. The MiFID II pricing-rules can be described as light-touch, since they leave discretion for MiFID II Data Suppliers in making the calculations (e.g. MiFID II does not define the ‘reasonable relationship’ between production and dissemination costs and the prices) and the terms and conditions on which the data is offered. To keep this discretion in check, MiFID II requires MiFID II Data Suppliers to disclose to the general public the price levels, as well as the terms and conditions, on which the data is supplied (sub-element 6).

MiFID II also provides other sub-elements to ensure that MiFID II equity pre- and post-trade data is available on a reasonable commercial basis. First, MiFID II requires the data to be priced on a per-user pricing model, instead of per device (sub-element 3). The per-user pricing model aims to reduce the costs for end-users of data by requiring data charges on a per-user basis, instead of a per-device basis. The per-user pricing model is an important element through which data costs as supplied by data vendors is addressed, the latter being outside the scope of MiFID II. Second, MiFID II requires data services to be unbundled from other services (e.g. financial research) (sub-element 4). The aim here is to ensure that data consumers only have to buy data, instead of being required to also purchase other services.

The final element of a reasonable commercial basis requires data to be sold on a non-discriminatory basis (sub-element 5). The element of non-discrimination means that MiFID II Data Suppliers should offer the same prices, and other terms and conditions, to all data customers in the same customer category. Different prices are permitted between different types of customers, meaning that a degree of price discrimination is allowed (‘proportionate to the value which the market data represents to those customers’).

The specification of a reasonable commercial basis under MiFID II makes the regime more top-down in character. Under MiFID I market forces had more flexibility in this area. At the same time, the ascendancy of the EU over prices of equity pre- and post-trade data is not total. Several aspects of data prices remain the territory of data suppliers (MiFID II Data Suppliers and data vendors). This is evident in the following:

The points 1-4 show that MiFID II leaves discretion for both MiFID II Data Suppliers and data vendors. MiFID II introduces new top-down elements in the area of prices for equity pre- and post-trade data (EU regulation), albeit in a light-touch manner.