[ N E W S
R E V I E W ]
M
iFID II has yet to have
any significantly positive
impact on the conten-
tious issue of market data fees,
according to a review of the regula-
tion from the European Securities
and Markets Authority (ESMA)
published in early December.
Nearly two years after the
landmark regulatory regime came
into force, the European watchdog
published its first review into the
progress of MiFID II and conclud-
ed that it had “not delivered on
its objective to reduce the cost of
market data charged by trading and
Approved Publication Arrange-
ments (APAs).”
The rising cost of market data
has become a key and significantly
divisive issue among participants
both in Europe and North Ameri-
ca, with banks and asset managers
becoming increasingly vocal about
charges associated with market
data imposed by trading venues.
ESMA’s review found that trad-
ing venues consider the changes
in cost of market data “as a natural
consequence of the structural
changes in the market”, citing
the move from terminal use to
increased levels of electronic and
algorithmic trading, reflecting the
ongoing trend of market data be-
ing used within automated trading
processes.
“Trading venues stressed that
those changes require as well
constant investment in hardware
and software by trading venues
and other data providers. Further-
MiFID II failing to
improve market data
fee conflict as ESMA
looks to equities
consolidated tape
solution
The first review of MiFID II finds market data fee issues are
not being addressed by the regulation, as ESMA recommends
introduction of a consolidated tape for equity instruments.
more, trading venues and APAs
consider that MiFID II/MiFIR
created a need for adaptation to
regulatory requirements that had
an impact on data provision,” said
ESMA’s report.
However, market participants
and stakeholders presented a
very different view of the issue, as
“data users and vendors com-
plained about excessive fees,
complex market data policies and
overall higher costs for market
data,” particularly since the intro-
duction of MiFID II.
“Transparency is important to ensure that
markets are fair, sound and efficient. However,
after nearly two years of operating under MIFID
II, we are still lacking a reliable view of liquidity
across the EU.”
STEVEN MAIJOOR, CHAIR, ESMA
20 // TheTrade // Winter 2019
Some market data users also
highlighted the “introduction of
fees for services which were pre-
viously provided free of charge”
and changes in the way in which
definitions included in price lists
have changed.
Under MiFID II, trading venues
and data providers are required to
publish market data on a ‘reason-
able commercial basis’, to provide
market data in a disaggregated
format, and to make market data
available, free of charge, 15 min-
utes after publication.
Following its review, ESMA
stated that it intends to “start
working on supervisory guidance
on the application of the provi-
sion to provide market data on a
reasonable commercial basis and
towards improving the quality of
OTC data.”
The market data fee conflict was
also evident in North American