18.III.2.5 Interim conclusion

The EU considers that all market participants (buy-side, sell-side, and issuers) benefit from a high degree of equity pre- and post-trade transparency. At the same time, the EU acknowledges that exceptions to pre- and post-trade data publication (dark liquidity and deferral of post-trade data publication) are necessary to preserve liquidity. Market philosophies play an important role here. Exceptions to equity pre- and post-trade data publication are generally uncontroversial when the rationale is to protect market participants. By contrast, the market-shaping and market-led philosophy uphold different opinions as to exceptions that improve the position of some market participants, while not contributing to price formation for all market participants. The market-led philosophy supports such exceptions, whilst the opposite is true for the market-shaping camp. From the ISD to MiFID II a shift is apparent towards a more market-shaping approach. This means that the EU has shifted to the perception that exceptions to equity pre- and post-trade data publication overall need to be tightened.

Market participants have different needs in terms of data characteristics, such as speed and the amount of data. What market participants have in common is a growing demand for equity pre- and post-trade data. The growth in demand is the result of fragmentation, technological innovation, and regulatory requirements, a trend which seriously gained momentum under MiFID I and which continues under MiFID II. The growth in data demand has resulted in stronger EU emphasis on data access (i.e. prices and terms and conditions for data usage). The EU perception of an ‘optimal degree’ of equity pre- and post-trade transparency does, since MiFID I, also include data access. The EU opinion shows a shift from a market-led towards a market-shaping view. The EU recognises the growth in demand (additional and more diverse data consumption), as well as investments required from data vendors (market-led perspective), but overall considers data prices to be too high (both under MiFID I and MiFID II) and wants to correct (shape) these ‘market failures’ (market-shaping perspective).