18.IV.2.2.1 Main changes from ISD to MiFID II

MiFID I reflected the reflected the view that, by abolishing the ISD concentration-rule, the benefits of competition outweighed the potential risks. Aware of the fragmentation risks involved with a competitive market setting, the EU introduced a top-down pre- and post-trade transparency regime for certain shares, which applied to RMs, MTFs, and investment firms operating outside such venues (including, but not only, SIs).1 By contrast, the MiFID I legal framework mainly relied on market forces (bottom-up) to ensure adequate comparison of pre- and post-trade data in the competitive market place. ‘Mainly’, because the MiFID I text provided some rules to facilitate high quality, standardised, and timely data from the arrangements making the pre- and post-trade data public.2 The MiFID I text left consolidation services entirely up to the market. In drafting MiFID I, the EU believed that market forces – in particular due to technological innovation – would be able to ensure sufficient publication and consolidation. Only some EU rules on publication were deemed necessary at the time.3