5.VI.1.2 Background

The MiFID II reference data provisions are best understood against the background of other MiFID II, as well as Market Abuse Regulation (MAR), requirements. MiFID II requires RMs, MTFs (and OTFs) and SIs to submit reference data for financial instruments to their NCAs (or ESMA in case of delegation).1 The NCAs are in turn required to transmit the reference data to ESMA for subsequent publication on the ESMA website. ESMA indicates that the use of reference data is ‘in particular required to support the scope of transaction reporting under MiFIR, as well as market abuse surveillance activities under MAR’.2 In other words, the MiFID II reference data provisions are in particular relevant for transaction reporting (certain post-trade data for NCA supervisory practices) and market abuse provisions.

That being said, reference data is also important for the MiFID II equity pre-trade transparency regime. As shown above, reference data enables to identify (a) whether or not equity instruments are traded on an RM/MTF and (b) the asset class (equity versus non-equity) and sub-asset class (e.g. shares or ETFs), all determining the applicable MiFID II equity pre-trade transparency rules. ESMA has indicated that reference data is one of the ‘cornerstones’ of the MiFID II data system, including for equity pre-trade transparency purposes.3 Reference data already existed under MiFID I (and was kept by CESR/ESMA) for shares (and bonds) admitted to trading on an RM. New under MiFID II is the amount of reference data. Given the extension of the MiFID II scope, MiFID II reference data provisions have been introduced for a broader range of financial instruments, including equity instruments traded on RMs and MTFs.4

New under MiFID II is also the extent to which reference data collection tasks have been delegated from NCAs to ESMA. Many NCAs (not: all) have delegated the data collection tasks for reference data. The rationale behind the delegations is to collect reference data in a more efficient and harmonised manner across the EU/EEA.5 The idea is that accordingly ESMA can function as a central facility for reference data.6 The legal basis for delegation is laid down in the ESMA Regulation.7 The ESMA Regulation makes clear that where tasks are delegated, the responsibility for supervisory decisions remain with the delegating NCA.8

Overview of data flow for reference data in case of a non-delegating NCA9

Overview of data flow for reference data in case of a delegating NCA10