13.III.4.1.2 Framework for APAs

In drafting MiFID II, the EU aimed to address the concerns about equity post-trade data under MiFID I. Particular concerns were raised about the lack of quality in equity post-trade data published outside RMs and MTFs. CESR observed that the concerns were particularly pronounced in the Member States where all equity post-trade data was previously published by the main RM (ISD situation). In these Member States, CESR said, the main RM not only consolidated equity data, but also ‘monitored the quality and took appropriate remedial action as necessary’.1 CESR recommended the Commission to improve the quality of data consolidation by introducing new standards to improve data quality and achieve greater consistency in trade publication practices.2 CESR supplemented its recommendations by proposing investment firms to publish their post-trade reports through ‘Approved Publication Arrangements’ (APAs), being authorized entities that would be subject to prescribed standards.3 The proposal of CESR resembled features of the system set up by the UK for MiFID I in which so-called ‘Trade Data Monitors’ (TDMs) ensured that third parties publishing post-trade data had adequate arrangements in place to ensure data quality.4 Market participants almost unanimously supported the proposed APA-regime.5 The same was true for CESR’s proposal to harmonize post-trade transparency standards across the European financial sector.6 The Commission adopted CESR’s recommendations in the MiFID II-proposal.7

The European Parliament adjusted the Commission’s proposal by suggesting APAs to publish equity post-trade information for both (a) RMs and MTFs; and (b) investment firms trading outside an RM or MTF.8 The objective of the European Parliament was to ensure the consistency and qualify of such data and to enable the delivery of a consolidated tape for post-trade data.9 Contrarily, the final position of the Council adopted the proposal of the Commission as also reflected in the final MiFID II-text (MiFIR). Accordingly, investment firms trading outside RMs and MTFs (and not: RMs and MTFs) would be required to publish equity post-trade information through an APA.10 The change of the Council reflected the view that RMs and MTFs were already capable to publish the equity post-trade data themselves and was also protected the position of RMs and MTFs in selling equity post-trade data.