ESMA releases final MiFID II and MIFIR market data obligations report

The European Securities and Market Authority (ESMA) has published its final report on MiFID II and MiFIR obligations concerning market data.

According to Asset Servicing Times, the final report provides guidelines to help data providers meet their responsibilities – under MiFID II and MiFIR – to publish market data ‘on a reasonable commercial basis’ as well as to offer market data access free of cost.

The ESMA had previously run a consultation from 6 November 2020 to 11 January 2021. During this time, the securities regulator had sought feedback from industry on a range of draft guidelines and then requested further opinion through consultations with key market stakeholders.

The ESMA claimed many of the respondents to its consultation paper highlighted the current complexity of market data policies, which can result in high administrative cost for its users.

In response, the report details that the Markets in Financial Instruments Directive II (MiFID II) and Markets in Financial Instruments Regulation (MiFIR) require market data to be made available to market participants in a more cost-effective and easily accessible manner to encourage steps to make market data available to a wider range of participants.

This includes Guideline 1, which requires market data providers to publish their market data policy in a more user-friendly and accessible way on their website.

The regulations will also demand that fees levied for market data should be based on the cost of producing and dispersing such data, with ESMA detailing in its consultation paper that the cost methodology should classify clearly how costs are encountered when producing and disseminating market data.

The guidelines also underlined that market data providers must offer market data on a standalone basis without being combined with other services. The securities organisation this unbundling would allow customers to ‘choose products according to their needs without being obliged to pay for additional services which they do not make use of’.

The application date for these market data guidelines has been set for 1 January 2022.

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