13.IV Publication and consolidation of equity pre-trade data

The previous paragraph examined the MiFID II publication and consolidation rules for MiFID II equity post-trade data. This paragraph provides a similar elaboration, albeit in the context of MiFID II equity pre-trade data. MiFID II subjects RMs, MTFs, and investment firms operating outside such venues (including SIs) to a stricter pre-trade transparency regime compared to MiFID I.1 A new element is that, in the area of equity trading, the pre-trade transparency rules apply to a wider range of financial instruments, that is – shares, depositary receipts, ETFs, certificates and other similar financial instruments traded on an RM or MTF (hereafter: equity instruments).2 At the same time – and in contrast with the equity post-trade transparency regime – MiFID II does not require investment firms trading outside RMs and MTFs, here being (1) SIs and (2) investment firms that are required to publish unexecuted client limit orders in certain shares, to publish through APAs.3MiFID II also does not require, but instead permits, CTPs to consolidate (equity or non-equity) pre-trade data.4

Compared to the MiFID II equity post-trade transparency regime, the MiFID II-regime for publication and consolidation of MiFID II equity pre-trade data is more bottom-up. Entities responsible for equity pre-trade data publication (e.g. SIs) have more choice in how to publish the data (publication through an APA is permitted, but not required). CTPs are permitted (not: obliged) to consolidate equity pre-trade data. That being said, MiFID II is stricter compared to MiFID I. MiFID II introduces several preconditions for efficient equity pre-trade data consolidation. The MiFID II framework is discussed below.