EU Equity pre- and post-trade transparency regulation (LBF vol. 21) 2021/17.I:17.I Introduction

EU Equity pre- and post-trade transparency regulation (LBF vol. 21) 2021/17.I

17.I Introduction

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MiFID II retains the competitive equity market setting of MiFID I, albeit that MiFID II covers concentration rules for the trading of certain shares (not: other equity instruments).1MiFID II is a reaction to MiFID I. Whilst under MiFID I consolidated equity pre- and post-trade data was available, several market participants (not: all) perceived the data to be too expensive. This was especially the case for equity post-trade data.2MiFID II intends to change the situation by using a more top-down approach for equity pre- and post-trade data prices. MiFID II provides the following rule-sets:

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Disaggregation of equity pre- and post-trade data (i.e. not as one product: ‘unbundled’);

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Specifying the meaning of a ‘reasonable commercial basis’; and

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Free equity pre- and post-trade data after 15 minutes of publication.

The MiFID II rules are part of the MiFID II aim of ensuring that market data is available to market participants in an easily accessible, fair and non-discriminatory manner. MiFID II also intends to decrease the average rates of market data and make them available to a wider range of market participants.3 The MiFID II rules suit with the broader MiFID II objective to enhance transparency for the EU equity markets. As we will see below, MiFID II does not want to achieve this aim by regulating all aspects of equity pre- and post-trade data prices. MiFID II leaves room for market forces to decide the actual costs of data, as well as flexibility through principle-based regulation (bottom-up). The current MiFID II approach is part of the MiFID II Review of ESMA and the Commission.4

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