13.IV.8 Concluding remarks

MiFID II covers a more top-down regime (EU regulation) for equity pre-trade data publication and consolidation compared to MiFID I. That being said, bottom-up elements remain present. On the one hand, MiFID II provides choice in area of publication services for equity pre-trade data, which reflects the earlier MiFID I-regime. With MiFID II the EU decided that, in contrast with the MiFID II equity post-trade data regime, equity pre-trade publication through several arrangements still needs to be possible. This part of the MiFID II approach reflects the importance of freedom in the area of equity pre-trade data publication (bottom-up). On the other hand, MiFID II introduces several top-down elements. Compared to MiFID I, the rules for equity pre-trade data publication arrangements have become stricter. This is evident in the introduction of APAs, CTPs, and ARMs that can provide additional publication services for equity pre-trade data. New top-down elements are also visible in the increase in harmonisation of MiFID II publication rules for SIs.1 The aim of the top-down elements is to increase the quality of published equity pre-trade data outside RMs and MTFs, although not a main driver of MiFID II (i.e. the main objective of MiFID II is to enhance the quality of equity post-trade data).

In the area of consolidation services for equity pre-trade data, MiFID II relies mainly on a bottom-up approach. Similar to MiFID I, MiFID II relies to a great extent on industry-led initiatives to provide a consolidated overview of equity pre-trade data (i.e. a consolidated quote). However, two things have changed compared to MiFID I. First, MiFID II provides several preconditions to support the establishment of consolidation services, most notably through its requirements for the publication arrangements (e.g. replacing the unregulated ‘third parties’ with APAs as a potential a publication arrangement). Second, MiFID II permits (but not obliges) CTPs to provide additional services in the area of equity pre-trade consolidation.2 The situation for equity pre-trade consolidation therewith contrasts with the regime for equity post-trade data, where MiFID II requires CTPs to consolidate all equity post-trade data as published by RMs, MTFs, and APAs. Nonetheless, de facto the situation for CTPs has not changed, as until this point in time no CTP has emerged (see section III above).3