European exchanges will face closer monitoring of the prices they charge customers for basic data, after regulators ruled that the MiFID II markets revamp had not delivered on its aim of cutting the costs of trading.
A survey of data prices in Europe found that the 2018 implementation of MiFID II had not meant data was being supplied to the market on a “reasonable commercial basis”, as the legislation had stipulated. ESMA in a statement said it advocated more supervisory guidance and small legislative measures to bring the market into line. The tweaks included greater transparency and standardisation on fees to receive core information — such as the prices offered and paid for a particular stock, and the sizes and volumes of trades — and greater powers for national regulators to take action. ESMA also said the region’s equity markets should have a single record of crucial trading data, known as a “consolidated tape”, and warned of potential regulation of prices if the new standards were not met. Steven Maijoor, chairman of ESMA, said: “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.”
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MiFID II/MiFIR Review Report No. 1
ESMA recommends real-time consolidated tape for equity
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