18.IV.2.3.1 Main changes from MiFID I to MiFID II: equity post-trade data

MiFID II is a reaction to the publication and consolidation issues of MiFID I (see paragraph above). To ensure high quality publication and consolidation – in particular for post-trade data – the EU uses a more top-down strategy under MiFID II. The top-down elements of the EU strategy are in particular evident in the MiFID II framework for post-trade data publication and consolidation. MiFID II has introduced the regulatory status of ‘data reporting service providers’, including APAs and CTPs.1 Investment firms that execute orders outside an RM or MTF are required to publish the MiFID II equity post-trade data through an APA.2 RMs and MTFs have no such obligation. RMs and MTFs can publish MiFID II equity post-trade data through proprietary arrangements (i.e. themselves) or through an APA.3MiFID II also covers a regulatory framework for CTPs. In short, CTPs are required to (i) collect MiFID II equity post-trade data from RMs, MTFs, and APA and (ii) to consolidate the data in one place.4 With MiFID II the EU decided that, by introducing APAs and CTPs, the benefits of harmonized publication entities overshadowed the market-driven approach of MiFID I. The EU aims to hedge the risk of excessive regulation by permitting APAs, respectively CTPs, to compete with each other. In other words, there is not one APA or CTP. In addition, MiFID II permits non-regulated entities, such as data vendors (i.e. shadow-CTPs), to compete with CTPs in collecting post-trade data and consolidating the data in one place.5 In other words, the ascendancy of the EU over equity post-trade data publication and consolidation is not total. MiFID II can be characterized as a big push, rather than a complete mandate, towards a reliable and accessible overview of equity post-trade data.