The European Parliament and Council have agree on an overhaul of MiFID II and MiFIR designed to improve market data transparency,

Graham Dick, market structure analyst at Aquis Exchange, said in statement:

“It is extremely good news that the European Parliament, Commission and Council have agreed on the creation of a consolidated tape for European equities. A consolidated tape will be of considerable benefit to the capital markets industry, promoting transparency and ultimately helping to boost growth in European equities.

This agreement marks consensus on the structure of the consolidated tape, and sets a much-needed timetable for development. Given the considerable analysis and debate so far, this is a significant milestone and we congratulate the trilogue on having reached a conclusive compromise which all parties will be able to move forward with.

Aquis fully supports the implementation of a consolidated tape, and we believe there is real opportunity for the EU to create a well-governed and cost-effective tape which could ultimately become the gold standard worldwide.”

Source: Aquis

The #MiFIR agreement paves the way for a more integrated, competitive, and dynamic #CapitalMarketsUnion!

We thank @danutahuebner for her leadership and constructive approach to this agreement. https://t.co/70v0JojARO

— Managed Funds Association (@MFAupdates) June 29, 2023

MFA Statement on MiFIR Agreement

MFA issued the following statement from Head of EU Government Affairs Taggart Davis in response to the MiFIR agreement:

“The MiFIR agreement is a positive step for the competitiveness of EU capital markets and the broader European economy. It supports broader, cost-effective access to market data, which enhances the ability of alternative asset managers to deliver reliable returns for their investors, including EU-based pensions. We appreciate Danuta Hübner MEP, the Swedish Presidency, and other negotiators for their leadership and constructive approach to a deal that paves the way for a more integrated, competitive, and dynamic Capital Markets Union.”

Source: MFA

Statement by Niels Tomm, board representative at Deutsche Börse, co-CEO at CEINEX, on behalf of the joint venture initiative to provide a consolidated tape for Europe on the Trilogue agreement:

“Yesterday’s decision from the European institutions provides clarity on the legislative framework for a consolidated tape that aims to benefit all market participants. Our joint venture will be uniquely suited to take on this opportunity and provide a comprehensive, standardized and consistent source of market data. The Joint Venture of 14 European exchanges is actively taking steps to prepare for the delivery of the Consolidated Tape (CT), demonstrating their commitment to implement this significant European capital markets project and the long-term success and prosperity of retail investors and market participants.”

Consolidated tape or single data feed for Europe's capital markets, and a ban on payment-for-order-flow (PFOF). A single financial market data source has been on the agenda since MiFID I in 2007, big step for bond data. PFOF deal predicts progress in tackling excess fees on funds https://t.co/hs47xl7Wxn

— Karel Lannoo (@karel_lannoo) June 30, 2023

A key aspect of this reform package is the introduction of consolidated tapes for key asset classes, something that AIMA has long advocated for.#alternativeinvestments #hedgefunds #mifid #mifidii #data

— AIMA (@AIMA_org) June 30, 2023

DEAL ?@EP_Economics and #EU2023SE on the reviews of #MiFIR and #MiFID @danutahuebnerhttps://t.co/JdlQNJig7r pic.twitter.com/sowBjHxtN1

— ECON Committee Press (@EP_Economics) June 29, 2023

Capital markets union: Council and Parliament agree on proposal to strengthen market data transparency

The Council has reached a provisional agreement with the European Parliament on changes to the EU’s trading rules that will increase the global competitiveness of the EU’s capital markets and give investors access to the market data necessary to invest in financial instruments more easily.

The revision of the Markets in Financial Instruments Regulation (MiFIR) and the Second Markets in Financial Instruments Directive (MiFID II) aims to empower investors, in particular by making consolidated market data easily available at EU level.

I am glad we have found a political agreement on this review that will bring more transparency and make market data more available. A more transparent and accessible financial market will improve the level-playing field between investors and strengthen the EU’s competitiveness at international level, to the benefit of businesses and citizens.

Consolidated market data

Currently, trading data is scattered across multiple platforms, such as stock exchanges and investment banks, making it difficult for investors to access the accurate and up-to-date information they need to take decisions.The revision agreed on today will establish EU-level ‘consolidated tapes’ or centralised data feeds for different kinds of assets, bringing together market data provided by platforms on which financial instruments are traded in the EU.

This will make it easier for both professional and retail investors to access key information such as the price of instruments and the volume and time of transactions.

Market data from all trading platforms will be included in consolidated tapes, which will aim to publish the information as close as possible to real time. As a result, investors will have access to up-to-date transaction information for the whole of the EU.

Payment for order flow

The agreement reached imposes a general ban on ‘payment for order flow’ (PFOF), a practice through which brokers receive payments for forwarding client orders to certain trading platforms. Today’s compromise introduces also a possibility to member states where the practice of PFOF already existed to allow investment firms under its jurisdiction to be exempt from the ban provided that PFOF is only provided to clients in that member state. However, this practice must be phased out by 30 June 2026.

Commodity derivatives

The co-legislators also reached an agreement on amendments proposed by the European Parliament on commodity derivatives.

Next steps

Once the text of the provisional political agreement has been consolidated, it will need to be formally adopted by both the Council and the Parliament, before it can be published in the EU’s Official Journal and enter into force.

Background

On 25 November 2021 the Commission presented a package of measures aimed at boosting Europe’s capital markets by improving the ability of companies in the EU to raise capital. A key element of the package was a review of the Markets in Financial Instruments Regulation (MiFIR) and the Second Markets in Financial Instruments Directive (MiFID II), which together regulate investment services and financial markets activities in the EU.

The aim of the review was to increase transparency on capital markets, improve competitiveness and ensure a level playing field.The Council agreed on its general approach on 20 December 2022.