EU Equity pre- and post-trade transparency regulation (LBF vol. 21) 2021/13.V:13.V MiFID II review

EU Equity pre- and post-trade transparency regulation (LBF vol. 21) 2021/13.V

13.V MiFID II review

Documentgegevens:

mr. J.E.C. Gulyás, datum 01-02-2021

Datum: 01-02-2021
Auteur: mr. J.E.C. Gulyás
JCDI: JCDI:ADS266972:1
Vakgebied(en): Financieel recht / Bank- en effectenrecht
Financieel recht / Europees financieel recht
Financiële dienstverlening / Financieel toezicht

MiFID II requires the Commission, after consulting ESMA, to present a report to the European Parliament and the Council on various provisions. Among these provisions is the functioning of the equity CTP (i.e. consolidated tape for equity post-trade data).1MiFID II requires the reports to check (a) the availability and timeliness of equity post-trade data in a consolidated format (irrespective whether traded on an RM/MTF or not) and (b) the availability of timely full and partial equity post-trade data that is of high quality, in formats that are easily accessible and useable for market participants.2MiFID II also requires the Commission, after consulting ESMA, to assess the feasibility of developing a consolidated quote (i.e. consolidated equity pre-trade data).3

MiFID II emphasizes the importance of an equity consolidated tape. MiFID II states that where the Commission concludes that CTPs have failed to provide information under points (a-b), the Commission shall accompany its report by a request to ESMA to (i) launch a negotiated procedure for the appointment (ii) through a public procurement process run by ESMA (iii) of a commercial entity operating a consolidated tape.4 ESMA has published a review report in December 2019. The ESMA review is based on feedback from market participants, representing data users, trading venues and data vendors, as well as the advice from the Securities and Markets Stakeholder Group (SMSG).5 The Commission published a consultation on the review of the MiFID II framework. A key priority of the ESMA review and the Commission consultation is to establish a consolidated tape. ESMA and the Commission also examine whether or not a consolidated quote should be introduced.6

13.V.1 Reasons for the lack of equity CTPs 13.V.2 Risk assessment of not having an EU equity CTP 13.V.3 International experience with equity CTPs 13.V.4 Key factors in establishing a successful equity CTP 13.V.5 Feasibility of an equity consolidated quote 13.V.6 Impact of Brexit on the establishment of an EU equity CTP 13.V.7 Concluding remarks

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Art. 90(2) MiFID II Directive.

Art. 90(2) MiFID II Directive. The report also needs to include whether the prices of the equity consolidated tape are reasonable (ibid). For an examination of the MiFID II Review of data prices, reference is made to Part IV of the research.

Art. 52(5) MiFIR.

Art. 90(2) MiFID II Directive.

ESMA, MiFID II/MiFIR Review Report No. 1: On the development in prices for pre- and post-trade data and on the consolidated tape for equity instruments, 5 December 2019 (ESMA70-156-1606) (hereafter: ESMA, MiFID II/MiFIR Review Report No. 1, 5 December 2019(ESMA70-156-1606), p. 8.

For the sake of completeness, ESMA and the Commission use the term ‘consolidated tape’ in a broad sense, namely potentially also including pre-trade data (‘a consolidated quote tape’). For reasons examined in chapter 10, I believe that is more clarifying to distinguish between a consolidated tape (post-trade) and a consolidated quote (pre-trade) (although both can be operated by the same entity).