18.IV.2.3.6 Interim conclusion

Experience with MiFID II illustrates that the comparison of post-trade transparency is still considered to be insufficient. Although APAs are in place, MiFID II has not (yet) brought a CTP and the APA data quality is overall considered as too low. The ESMA Review suggests a more top-down approach for common equity post-trade data standards and stricter conditions to establish an equity CTP (e.g. mandatory contribution of RMs, MTFs, and to one or multiple equity CTPs). Whilst there is agreement in some areas (e.g. common post-trade data standards), several of ESMA’s recommendations are controversial in nature. The design of a new CTP regime is in effect contentious.

MiFID II struggles less with equity pre-trade data publication and consolidation. A main reason here is that an EBBO (consolidated pre-trade data) is closer to being realized than a consolidated tape (consolidated post-trade data). MiFID II ‘struggles less with equity pre-trade data (…)’, because there are concerns. The EU has no official EBBO. The lack of an EBBO stems from a lack of harmonisation (i.e. lack of top-down elements) in the area of equity pre-trade data consolidation. Some market participants might for this reason not have access to consolidated pre-trade data.1 The situation can be solved through the establishment of a consolidated quote. The establishment of a consolidated quote is part of the MiFID II Review of the Commission and to some extent of ESMA. The establishment of a consolidated quote is technically feasible, but deemed more complex compared to the establishment of a consolidated tape. The establishment of a consolidated quote is part of the Commission’s MiFID II Review. Sufficient political support will be required to set up a consolidated quote through regulation (i.e. top-down approach). Once again, only time will tell what the final EU strategy will be.

Finally, Brexit has implications for the establishment of a consolidated tape or potentially consolidated quote. Despite Brexit, there is stakeholder support for the establishment of an EU consolidated tape, especially where the UK data will be included. Given the political uncertainty of Brexit, it is too early to draw final conclusions. At the moment it is too uncertain what the exact implications of Brexit for the establishment of an EU consolidated tape or potentially EU consolidated quote will be.