Memo #
33003

ESMA Consultation on MiFID II/R Market Data Obligations: Draft Comment Letter for Member Comment by 6 January 2021
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[33003]

December 22, 2020 TO: Derivatives Markets Advisory Committee
Equity Markets Advisory Committee
Fixed-Income Advisory Committee
ICI Global Regulated Funds Committee
ICI Global Trading & Markets Committee RE: ESMA Consultation on MiFID II/R Market Data Obligations: Draft Comment Letter for Member Comment by 6 January 2021

 

As previously advised,[1] on 6 November 2020 the European Securities and Markets Authority (ESMA) published a consultation paper (CP) on draft guidelines for the market data obligations under MiFID II/MiFIR. ESMA is inviting comments on the CP through a response form by 11 January 2021. Attached is ICI Global’s draft response to the CP. The response takes account of feedback from a member call and prior ICI Global submissions. We are seeking member comments on the draft response by close of business on Wednesday 6 January 2021.

Draft Response

In the draft response, we set out our broad support for ESMA’s proposed guidelines and recommend the following enhancements:

  • Accounting methodologies – market data providers (MDPs) should: publish their current accounting methodology; give customers advanced notice of changes, including impacts on market data prices; and signpost the publication of their methodology (e.g., on a common location on MDP’s website).
  • Audit practices – MDP’s should limit audit practices to only those necessary to confirm customers’ compliance with market data agreements (MDAs) and clearly set out how customers can positively demonstrate compliance with the MDA.
  • Customer categorisation – MDPs should publish easily accessible and verifiable criteria and information on their customer categories and enable regulated fund “complexes” to select whether they are placed into a customer category based on the complex’s use of data or the use made by different legal entities within the complex.
  • Non-discriminatory access – MDP’s should ensure that terms and conditions and technical arrangements for data access are applied in a non-discriminatory manner for customers that are part of a corporate group, for instance a regulated fund “complex” and the different legal entities within the complex.
  • Per user basis charging – MDPs should either charge for display data on a per user basis – only requiring customers to meet bare minimum qualifying conditions – or justify why they are unable to offer a per user model.
  • Unbundled data – MDPs should disclose the bundled price of all the MDP’s product and services (and a sub-set, if applicable) alongside the price for each item of unbundled data.
  • Reasonable Commercial Basis (RCB) Information – ESMA should enhance its proposed template of RCB information, require MDPs to signpost where their RCB information has been published (e.g., a common location on the MDPs’ website) and explore the merits of developing a database of MDP’s RCB information, including analytical tools to support easy customer access to and side-by-side MDP comparison.
  • Additional guidance – to enable customers more easily compare approaches across MDPs, ESMA should explore the merits of providing additional guidance and/or Q&A to: further explain and harmonise MDP’s cost typologies; terms and conditions and technical arrangements for data access (e.g., latency and connectivity options); and MDP’s approaches to presenting accounting methodologies.

Our draft response also encourages policymakers, including ESMA, to prioritise changes to MiFID II/MiFIR to support the delivery of a comprehensive, thoughtfully implemented consolidated tape.

Next Steps

We are inviting member comments on our draft response by close of business on Wednesday 6 January 2021 to allow us to file our feedback with ESMA by the 11 January 2021 deadline. ESMA expects to publish a final report and final guidelines by Q2 2021.

 

Giles Swan
Director of Global Funds Policy
ICI Global

 

Attachment

endnotes

[1] See ICI Memorandum No. 32973, RE: ESMA Consultation on MiFID II/R Market Data Obligation, dated 10 December 2020, available from https://www.iciglobal.org/iciglobal/pubs/memos/ci.memo32973.global