Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Regulation (EU) No 600/2014 as regards enhancing market data transparency, removing obstacles to the emergence of a consolidated tape, optimising the trading obligations and prohibiting receiving payments for forwarding client orders
Date: 2021-11-25
Institutions: Directorate-General for Financial Stability, Financial Services and Capital Markets Union, European Commission
Subjects: capital market, data collection, disclosure of information, financial instrument, financial legislation, financial supervision, financial transaction, investment company, share

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   EUROPEAN COMMISSION  Brussels, 25.11.2021  COM(2021) 727 final 2021/0385 (COD)  Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Regulation (EU) No 600/2014 as regards enhancing market data transparency, removing obstacles to the emergence of a consolidated tape, optimising the trading obligations and prohibiting receiving payments for forwarding client orders (Text with EEA relevance) {SEC(2021) 573 final} - {SWD(2021) 346 final} - {SWD(2021) 347 final}  
 
EXPLANATORY MEMORANDUM 

1. 

• 

CONTEXT OF THE PROPOSAL 

Reasons for and objectives of the proposal 

This  initiative  is  one  of  a  series  of  measures  that  implement  the  Capital  Markets  Union 
(CMU). It aims to empower investors, in particular smaller and retail investors,1 by enabling 
them to access market data necessary to invest in shares or bonds more easily and by making 
EU market infrastructures more robust. This will also help increase market liquidity, making 
in  turn  easier  for  companies  to  get  funding  from  capital  markets.  In  order  to  deliver  on  its 
objective  of  fostering  a  true  and  efficient  single  market  for  trading,  the  Commission  has 
identified  three  priority  areas  for  the  review:  improving  transparency  and  availability  of 
market  data,  improving  the  level-playing  field  between  execution  venues  and  ensuring  that 
EU  market  infrastructures  can  remain  competitive  at  international  level.  This  initiative  is 
accompanied  by  a  proposal  to  amend  Directive  2014/65/EU  on  markets  in  financial 
instruments (MiFID) and is included in the Commission’s 2020 Work Programme. 

In its Communication on ‘The European economic and financial system: fostering openness, 
strength  and  resilience’  of  19  January  2021,2  the  European  Commission  confirmed  its 
intention to propose to improve, simplify and further harmonise capital markets’ transparency, 
as part of the review of the MiFID II and MiFIR framework (MiFID/R). In the wider context 
of  the  efforts  aimed  at  strengthening  the  international  role  of  the  euro,  the  Commission 
announced that such a reform would include the design and implementation of a consolidated 
tape,  in  particular  for  corporate  bond  issuances  with  an  aim  of  increasing  the  liquidity  of 
secondary trading3 in euro-denominated debt instruments. 

On the establishment of a consolidated tape, in the 2020 CMU Action Plan4 the Commission 
announced  that  it  would  put  forward  a  legislative  proposal  by  the  end  of  2021  to  create  a 
centralised  database  meant  to  provide,  for  equity  and  equity-like  financial  instruments,  a 
comprehensive  view  on  market  data,  namely  on  prices  and  volume  of  securities  traded 
throughout  the  Union  across  a  multitude  of  trading  venues.  This  centralised  database,  also 
referred  to  as  the  ‘consolidated  tape’5  would  have  the  objective  to  “improve  overall  price 
transparency across trading venues”.  

• 

Problems that this proposal intends to tackle  

This proposal intends to tackle liquidity and trade execution risk. The former corresponds to 
the risk that there is not enough depth of market (i.e. buyers and sellers willing to trade), the 
latter corresponds to the inability to execute at a given price limit or in a given time period. 
Both  result  from  a  lack  of  correct  and  timely  information  on  prices  and  available  trading 
volumes  for  traded  securities,  as  well  as  the  risk  that  insufficient  transparency  affects  the 
share trading landscape and the competitiveness of the EU as a financial hub.  

1 
2 
3 

4 
5 

Retail investors refers to a large spectrum of investors that are non-professional investors.  
https://ec.europa.eu/info/publications/210119-economic-financial-system-communication_en.  
Secondary  trading  denotes  capital  market  activity  that  takes  place  after  the  issuance  of  a  financial 
instrument. The issuance can be done for example by means of an initial public offering (IPO). 
https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM:2020:590:FIN.  
The concept of a consolidated tape originates from equity markets in the US and dates back to the late 
1970s. Magnetic tape is used as a recording medium to store data. Whereas magnetic tape is used today 
still for long-term data storage (backup and archiving), in the 1970s this was the main storage medium. 

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As  pointed  out  in  the  Market  Structure  Partners  (MSP)  study  on  the  creation  of  an  EU 
consolidated  tape6,  liquidity  risk  is  a  consequence  of  the  need  to  navigate  the  fragmented 
execution markets in the Union in order to identify buying and selling interests to execute a 
transaction  in  its  entirety.  Absent  a  comprehensive  picture  of  all  available  liquidity  pools, 
certain  investors  might  not  be  in  a  position  to  execute  all  transactions,  or  they  might  only 
execute  transactions  in  part  or  at  a  less  attractive  price.  The  economic  cost  of  imperfect 
market transparency can be measured both in terms of “implementation shortfall” (i.e. trades 
are executed at prices that do not reflect the best available sales offer or purchase bid) and in 
terms of missed trading and investment opportunities. These costs go against the objectives of 
the CMU, which is to provide well-functioning, liquid and integrated capital markets.  

The impact of market fragmentation, especially across national lines, is particularly acute for 
smaller  asset  managers  and  smaller  banks.  These  market  participants  do  not  have  the  same 
possibilities  to  access  information  on  market  data  across  multiple  venues  as  sophisticated 
market  participants,  such  as  large  “sell-side”  investment  banks  or  electronic  market  makers 
have. Lack of market information leads to the risk of ill-considered investment decisions that 
could be avoided if a complete picture of the market would have been available. 

In equities markets, asset managers interviewed as part of the MSP study estimate that the 
annual cost of not having a complete and accurate view of market data (defined as “slippage”) 
is  between  0  to  1.0  basis  points  of  their  annual  traded  value.  Some  interviewees  rated  the 
annual  costs  even  higher  at  above  5.0  basis  points.  Respondents  to  the  MSP  study  make 
different estimates on the cost of having an imperfect view of the market. The larger the firm 
and the more extensive the resources available to compile and  clean the  data, the lower the 
estimate  might  be.  By  applying  these  estimates  to  the  annual  traded  value  of  European 
equities, the total cost of not having an accurate view of the equities markets can be as high as 
EUR 10.6 billion annually whereas almost a third of the respondents indicate that the cost is 
between 0.5 and 1 billion euro annually7. 

In  bond  markets,  asset  managers  estimate  the  cost  in  basis  points  to  their  annual  trading 
strategies resulting from a lack of consolidated and accurate market data view in the range of 
0 to 5 basis points8 .  

Liquidity and trade execution risks are also prevalent in markets for derivatives that are not 
traded on venues  (also  called  ‘over-the-counter’  trades or ‘OTC’). OTC  derivatives markets 
are  dealer  markets,  where  major  international  banks  offer  bespoke  contracts  to  their  clients, 
e.g., for taking a position to protect against future price movements (hedging). There is very 
little  post-trade  transparency  in  OTC  markets.  The  2020  ESMA  annual  statistical  report9 
shows that OTC derivatives still account for 85% of the notional value of derivatives traded in 
the Union (with the remaining 15% being traded on exchange). Because there is currently no 
consolidated public view of prices for OTC derivatives, the high percentage of OTC trading 
contributes to opacity in the pricing of these derivatives and, in consequence, to information 
asymmetries that primarily hurt smaller market participants. 

6 

7 
8 
9 

MSP  (2020),  The  study  on  the  creation  of  an  EU  consolidated  tape,  commissioned  by  the  European 
Commission. 
https://op.europa.eu/en/publication-detail/-/publication/82763219-1cbe-11eb-b57e-
01aa75ed71a1/language-en/format-PDF/source-169654830. 
MSP study, Figure 14, p 42 
MSP study, Figure 15, p 43 
https://www.esma.europa.eu/sites/default/files/library/esma50-165-1355_mifid_asr.pdf.  

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The  absence  of  consolidated  market  data  also  prevents  accurate  portfolio  valuations  and 
reduces the accuracy of indices across all asset classes (European equity, bond and derivatives 
benchmarks are less reliable). Large cap stocks are favoured by most investors, as evidenced 
in  the  large  number  of  investment  indices  that  focus  on  the  large  cap  universe  of  listed 
companies  (e.g.,  DJ  100,  S&P  500,  STOXX  600).  Informational  inefficiency  results  in  less 
indices that comprise smaller capitalisation companies and, in consequence, less index-driven 
funds channelling capital to smaller cap issuers (e.g., by virtue of exchange-traded funds that 
track a small or midcap index). 

Imbalance in the share trading landscape: another driver behind the proposed reform is the 
need to ensure that the share trading on lit (term used for pre-trade transparent) venues in the 
EU is approximately in line with ratios observed in other international financial centres. Stock 
exchanges  argue that  the decline of their market  share in stock trading is detrimental  to the 
development  of  the  Union’s  capital  markets  as  only  exchanges  and  multilateral  trading 
facilities (MTFs) offer full transparency on bids and offers (pre trade data) and on completed 
transactions (post trade data) and contribute to price formation. Banks and investments firms 
on the other hand claim that lit platforms have maintained and even increased market share in 
the  EU.  The  importance  of  maintaining  a  balance  between  traditional  stock  exchanges, 
alternative trading platforms, investment banks and other players that provide trading systems 
is well acknowledged. The review will therefore include amendments aiming to maintain this 
balance.  

international 

trend  of  vertical 

Competitiveness  of  EU  financial  markets:  certain  provisions  of  the  current  regulatory 
framework have created legal uncertainty for market participants. The open access provisions 
for exchange traded derivatives have been suspended multiple times by the co-legislators for a 
variety of reasons. The Commission deems it necessary to remove these provisions in order to 
foster competition, innovation and development of exchange-traded derivatives in the EU on 
one  side  and  building  further  clearing  capability  in  the  EU.  It  will  also  reflect  the  long-
standing 
trading  and  clearing for 
these types  of derivatives.  The  rationale  underpinning  this  trend  is  that  innovation  in 
exchange-traded  derivatives  is  not  served  by  the  “open  access”  obligation,  as  this  rule 
removes incentives to launch new exchange-traded derivatives contracts if competitors do not 
have  to  make  the  upfront  investment.  Likewise,  exchanges  would  no  longer  be  obliged  to 
accept  that  non-affiliated  clearing-houses  ensure  their  post-trade  operations.  This  proposal 
would also refine the perimeter of the share trading obligation (STO) to clearly limit it to EU 
ISINs.  In  addition,  the  proposal  would  introduce  a  possibility  to  suspend  the  derivatives 
trading  obligation  (DTO)  for  certain  investment  firms  that  would  be  subject  to  overlapping 
obligations when interacting with non-EU counterparties on non-EU platforms.  

integration between 

• 

Consistency with existing policy provisions in the policy area 

The  initiative  builds  upon  and  improves  the  existing  rules  that  govern  participation  in  the 
capital  markets  of  the  European  Union.  In  2007,  MiFID  I10  introduced  competition  in  the 
market for equity trading. Later iterations of MIFID extended competition to trading in non-
equity asset classes, such as bonds and derivatives. The consequence is that, when a broker or 
investor  wants  to  execute  an  order  to  buy  or  sell  an  asset,  they  can  choose  from  different 

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Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on  markets in 
financial 
and 
Directive 2000/12/EC of the European Parliament and of the  Council and repealing Council Directive 
93/22/EEC (OJ L 145, 30.4.2004, p. 1). 

amending  Council  Directives 

and 93/6/EEC 

85/611/EEC 

instruments 

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venues, such as regulated markets (RMs), multilateral trading facilities (MTFs), dark pools11, 
and systematic internalisers (SIs).  

Since MiFID I entered into application, the combined amount of multilateral venues and SIs 
across all asset classes in the EEA increased by 344, to a total of 476.12 Every trading venue is 
publishing  separate  market  data  reports.  Soon  after  MiFID  I  was  implemented,  the  issue  of 
market data fragmentation and market data monopolies13 came to the fore, primarily in equity 
markets.  

MiFIR,14  in  application  since  3 January 2018,  recognises  the  benefits  of  transparency  and 
market data consolidation for the investment community.  

To maintain a well-balanced trading landscape, the transparency rules that govern trading on 
exchanges  as  well  as  on  the  alternative  platforms  or  through  systematic  internalisers 
(investment  banks  and  market  makers)  would  benefit  from  certain  adjustments.  The  use  of 
certain  exemptions  from  the  transparency  rules  (so-called  “waivers”)  are  seen  as  being 
responsible  for  the  relatively  low  percentage  of  share  trades  that  are  executed  on  price 
transparent venues. The current regulation already contains rules to curb the use of the most 
commonly  used  transparency  waivers.  Rules  like  the  “double  volume  cap”  intend  to  put  an 
upper  limit  (cap)  on  the  amount  of  shares  that  market  participants  can  trade  under  a 
transparency  waiver.  Such  provisions,  apart  from  being  resource-intensive  to  administer  on 
the  part  of  the  regulators,  have  proven  to  be  rigid  and  collectively  introduce  unnecessary 
complexity  in  the  operation  of  equity  markets.  The  review  therefore  plans  to  streamline  the 
complex interplay between transparency waivers and the double volume cap.  

Furthermore,  as  regards  data  consolidation,  MiFIR  already  comprises  the  concept  of  a 
‘consolidated  tape  provider’  (‘CTP’).15  The  idea  behind  a  CTP  is  that  exchanges  and 
alternative trading venues would send real-time data streams to an accredited CTP. This CTP 
would make available to the public the exact same information, at so-called reasonable cost, 
using identical data tags and formats.  

The  current  rules  on  the  CT  rely  on  private  actors  (competing  consolidators)  consolidating 
market  data  from  various  execution  venues.  Based  on  the  MiFIR  provisions,  there  can  be 
multiple competing  CTPs,  but  it  is  also  possible  to  have  one  single  CTP  in  case  multiple 
providers do not step up. To date, this has not happened for a variety of reasons.  

The  proposed  reform  of  MiFIR  addresses  the  reasons  why  no  CTP  has  come  forward.  It 
amends  the  CT  provisions  in  MiFIR  to  facilitate  the  emergence  of  one  CTP  for  each  asset 
class (shares, ETFs, bonds and derivatives).  

11 

12 

13 
14 

15 

Dark pools are (dedicated parts of) MTFs or RMs that do not apply pre-trade transparency following the 
use of pre-trade transparency waivers.  
Data  is  based  on  the  2021  figures  from  the  ESMA  register  of  MiFID  entities.  See  Annex  4  for  the 
picture of the market in the main asset classes.  
Copenhagen Economics (2018), Pricing of market data 
Regulation  (EU)  No 600/2014  of  the  European  Parliament  and  of  the  Council  of  15 May  2014  on 
markets in financial instruments and amending Regulation (EU) No 648/2012 (OJ L 173, 12.6.2014, p. 
84). 
Provisions regarding the CTP were initially introduced in MiFID II, but have been replaced to MiFIR, 
which changes enter into force as of 1 January 2022.  

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• 

Consistency with other Union policies 

The  European  Union’s  financial  services  policy  encourages  transparency  and  competition. 
These policy goals extend to core market data. As part of the Capital Markets Union (CMU) 
action  plan,  the  Union  aims  to  create  an  integrated  view  of  EU  trading  markets.  A 
consolidated tape will provide consolidated data on prices and volume of traded securities in 
the EU, thereby improving overall price transparency across trading venues. It will also  give 
investors access to considerably improved market information at a pan-European level. 

2. 

• 

LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY 

Legal basis 

The MiFID/R framework is the rulebook governing participation in European capital markets. 
It  consists  of  a  Directive  2014/65/EU  (MiFID  II)  and  a  Regulation  (EU)  No  600/2014 
(MiFIR).  The  legal  basis  for  the  adoption  of  MiFIR  is  Article  114  of  the  Treaty  on  the 
Functioning  of  the  European  Union  (TFEU).  The  proposal  aims  at  enhancing  market  data 
quality and market data consolidation through amendments to existing rules on market data in 
MiFIR. Therefore, the proposed reform should also fall under the same legal basis.  

In  particular,  Article  114  TFEU  confers  the  European  Parliament  and  the  Council  with  the 
competence  to  adopt  measures  for  the  approximation  of  the  provisions  laid  down  by  law, 
regulation  or  administrative  action  in  Member  States  which  have,  as  their  object,  the 
establishment and functioning of the internal market. Article 114 TFEU allows the EU to take 
measures not only to eliminate current obstacles to the exercise of the fundamental freedoms, 
but  also  to  prevent,  if  they  are  sufficiently  concretely  foreseeable,  the  emergence  of  such 
obstacles, including those that make it difficult for economic operators, including investors, to 
take  full  advantage  of  the  benefits  of  the  internal  market.  Thus,  Article  114  TFEU  is  the 
appropriate  legal  basis  to  address  obstacles  in  data  consolidation  that  result  from  (1) 
fragmented market data sources; (2) unclear market data reporting standards and (3) complex 
market data licensing schemes. These are the main drivers that prevent a consolidated view of 
trading liquidity across the Union.  

More  specifically,  the  continued  lack  of  a  centralised  database  showing  market  data  for 
securities  traded  on  EU  trading  venues  would  prevent  EU  investors,  other  than  the  very 
sophisticated  ones,  from  having  a  consolidated  view  of  where  to  find  the  best  investment 
opportunities.  This  would  perpetuate  the  current  information  asymmetries  preventing 
investors  from  fully  benefiting  from  the  single  market.  Therefore,  the  use  of  Article  114 
TFEU appears as the most appropriate legal basis to tackle these problems comprehensively 
and uniformly and to avoid market fragmentation. 

• 

Subsidiarity (for non-exclusive competence)  

According  to  Article  5.3  of  the  TFEU  on  the  principle  of  subsidiarity,  action  on  EU  level 
should be taken only when the objectives cannot be achieved sufficiently by Member States 
alone  and  can  therefore,  by  reason  of  the  scale  or  effects  of  the  proposed  action,  be  better 
achieved at Union level.  

Trading  markets  for  various  financial  instruments  classes  are  spread  across  the  Union. 
Consolidating market data published by these trading venues requires a rulebook that applies 
across the Union. Action taken by individual Member States would not effectively address the 
need  for  consolidation  of  market  data  across  the  Union.  Member  States  could  attempt  to 
harmonise  market  data  reporting  standards  and  licensing  conditions  for  a  market  data 

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consolidator  by  means  of  national  laws.  National  initiatives  cannot  address  problems 
stemming from market data fragmentation across the Union.  

Different  Member  States  might  adopt  different  standards  or  opt  for  different  licensing 
schemes  applicable  to  a  market  data  consolidator.  Some  Member  States  might  not  take  any 
action at all. As market data consolidation has to work across the entire Union, it is both more 
effective and efficient to address reporting standards and data licensing conditions, necessary 
for  the  production  of  a  consolidated  view  of  all  trading  markets  at  Union  level. 
Standardisation of data reports and licensing conditions would apply only to reporting to the 
provider  of  a  consolidated  market  data  tape.  For  example,  market  data  licenses  that  do  not 
pertain to the production of a consolidated tape would not be subject to the proposed rules. 

• 

Proportionality 

The proposed harmonisation of market data standards and licensing conditions for the supply 
of market data to consolidated tape providers do not go beyond what is necessary to achieve 
the  stated  aims.  A  patchwork  of  national  rules  on  any  of  the  measures  contained  in  this 
proposal would not achieve the stated aims of market data consolidation in order to make this 
information  accessible  to  a  wider  group  of  market  participants.  Addressing  the  problems  of 
market data quality and the complexities around market data licensing requires the proposed 
harmonisation  of  market  data  reports  and  the  mandatory  use  of  these  reporting  standards  to 
supply market data to the provider of a consolidated tape. 

• 

Choice of the instrument 

An  amendment  to  the  MiFIR  Regulation  is  the  most  appropriate  legal  instrument  to  solve 
issues  arising  from  the  lack  of  a  consolidated  view  of  the  core  market  data  across  the  EU 
markets  as  it  allows  amending  certain  provision  in  MiFIR  as  well  as  adding  new  specific 
requirements. The use of a Regulation, which is directly applicable without requiring national 
legislation,  will  restrict  the  possibility  of  divergent  measures  being  taken  by  competent 
authorities at national level, and will ensure a consistent approach and greater legal certainty 
throughout the EU (e.g. for the mandatory contribution of core market data from exchanges of 
different Member States). 

3. 

• 

RESULTS 
CONSULTATIONS AND IMPACT ASSESSMENTS 

EX-POST 

EVALUATIONS, 

OF 

STAKEHOLDER 

Ex-post evaluations/fitness checks of existing legislation 

The  first  stakeholder  consultation  undertaken  by  the  Commission  after  the  entry  into 
application of the MiFID/R rules in January 2018 was carried out between February and May 
2020 (see below). It revealed that most investors do not have a complete view of prices and 
available volumes (ie liquidity) when deciding to invest in the Union’s capital markets.  

The consultation  revealed that the  exchange-specific (proprietary) market data products  that 
have emerged under MiFID  I and MiFID/R do not create a consolidated view of all trading 
markets.  Liquidity  available  in  alternative  markets  (MTFs/OTFs)  and  via  investment  banks 
that trade financial instruments against their inventory (systematic internalisers  –SIs) are not 
represented  on  these  proprietary  data  streams.  This  creates  significant  information 
impediments,  as  volumes  on  these  alternative  platform  can  constitute  up  to  50%  of  trading 
volume on any given trading day.  

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Securities  brokers  and  broker-dealers  are  responsible  for  providing  best  execution,  which 
means  achieving  the  most  advantageous  transaction  in  terms  of  price  and  the  lowest  total 
explicit and implicit costs16 to investors. Best execution means that brokers have to show their 
customers  the  prices  at  which  they  bought  and  sold  compared  with  prices  and  volumes 
available  on  different  exchanges  and  alternative  trading  venues  at  the  time  the  trade  was 
executed.  The  absence  of  a  consolidated  view  of  all  trading  markets  is  a  problem  when  a 
financial instrument is made available for trading not just on a single listing venue, but across 
several competing venues. An investor has, and should continue to have, the choice between 
competing venues, but currently has to rely on market data that only cover individual venues. 
As a result, investors have insufficient access to consolidated and comparable market data and 
cannot  compare  whether  they  would  have  obtained  better  execution  conditions  on  an 
alternative platform.  This prevents them from holding their securities  brokers  and broker-
dealers accountable on whether they achieved the best execution for any given trading order.  

The consultation  has  also  revealed significant  issues around the cost  to  procure market  data 
from  multiple  data  sources.  The  cost  of  obtaining  the  market  data  from  contributors 
(connecting and obtaining a license) currently accounts for roughly two-thirds of the overall 
cost of assembling market data. Because of this, data vendors, who make this data available to 
users,  tend  to  narrow  the  selection  of  sources  from  which  they  collect  and  offer  data.  As  a 
result, investors lack a comprehensive view of liquidity across all trading markets  and most 
investors are unable to afford the cost of obtaining a more comprehensive view. 

Between  the  end  of  2019  and  2021  ESMA  performed  in-depth  analyses  of  the  MiFID/R 
framework,  primarily  focussing  on  the  topics  addressed  in  the  review  clauses  in  Article  90 
MiFID and Article 52 MiFIR, and published review reports containing recommendations for 
changes in the legal framework17. These review reports built on extensive public consultations 
and  contained  detail  recommendations  relating  to  market  structure  topics,  in  particular  the 
current transparency regime.  

In  particular,  in  its  ‘MiFID  II/MiFIR  Review  Report  No.  1’18,  ESMA  found  that 
fragmentation  of  market  data  sources  increases  dependency  on  multiple,  venue-specific, 
proprietary  data  streams  which  only  cover  a  partial  view  of  available  trading  liquidity. 

16 

17 

18 

Explicit costs relate to the execution costs of a trade (in particular broker commission rates and  trading 
venue fees), while implicit costs relate to the impact of a trade on liquidity. 
ESMA published the following review reports: 
-  MiFID II/MiFIR Review  Report No. 1 On the  development in prices for pre- and post-trade data 
instruments: 

and 
mifid_ii_mifir_review_report_no_1_on_prices_for_market_data_and_the_equity_ct.pdf 
(europa.eu) 

consolidated 

equity 

tape 

the 

for 

on 

-  MiFID II/MiFIR Review Report on the transparency regime for equity and equity-like instruments, 
shares: 

cap  mechanism 

obligations 

volume 

trading 

the 

for 

double 

the 
https://www.esma.europa.eu/sites/default/files/library/esma70-156-
2682_mifidii_mifir_report_on_transparency_equity_dvc_tos.pdf  
in 
https://www.esma.europa.eu/sites/default/files/library/esma70-156-
2756_mifidii_mifir_report_on_systematic_internalisers.pdf  

internalisers 

systematic 

report 

and 

on 

-  MiFIR 

non-equity 

instruments: 

-  MiFID  II/MiFIR  Review  Report  on  the  transparency  regime  for  non-equity  instruments  and  the 
trading  obligation  for  derivatives:  https://www.esma.europa.eu/sites/default/files/library/esma70-
156-3329_mifid_ii_mifir_review_report_on_the_transparency_regime_for_non-
equity_instruments.pdf  

ESMA MiFID II/MiFIR Review Report No. 1 on the development in prices for pre- and post-trade data 
and on the consolidated tape for equity instruments. 

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Verifying  whether  all  market  data  sources  provide  access  to  their  market  data  in  a  fair, 
equitable and timely manner is  made  difficult by  the complexity of how proprietary market 
data  is  licensed  and  how  compliance  with  usage  restrictions  is  administered.  The  fact  that 
trading data from individual venues is unique and non-substitutable has allowed data licensing 
agreements  to  become  increasingly  detailed  and  onerous.  Firms  receiving  market  data 
therefore  face  significant  complexity  in  managing  ongoing  variation  in  their  licensing 
agreements,  incurring  operation  costs  and  risks;  they  also  often  bear  the  cost  of  complex 
audits of their licenses, imposed by data providers through ex-post fees.  

In  light  of  the  heterogeneous  market  data  pricing  policies  across  the  single  market,  it  is 
difficult  for a consolidator of market  data to  access  proprietary market  data streams  on fair, 
equitable and timely conditions. In its report on the consolidated tape, ESMA took the view 
that the current MiFID II rules do not oblige trading venues and APAs to submit market data 
to  a consolidated tape on fair  and reasonable terms.  Therefore, ESMA suggests that  trading 
venues  and  APAs  should  be  required  to  provide  data  to  the  consolidated  tape  either  by  (i) 
requesting trading venues and APAs to provide data to the consolidated tape, or, (ii) setting 
forth criteria to determine the price (and usage terms and conditions) for contributions to the 
consolidated tape. 

According  to  ESMA,  MiFID/R  did  not  deliver  on  its  objective  to  create  more  clarity  on 
licensing and pricing of proprietary market data. Prices for market data, in particular for data 
for  which  there  is  high  demand,  such  as  non-display  data,  have  increased  since  2017.  One 
trade association estimates that the total costs of data for a hypothetical small principal trading 
firm  with  access  to  various  venues  have  increased  by  27%,  from  EUR  917.000  in  2016  to 
EUR 1,16 million in 201919. ESMA furthermore recommends that a consolidated tape should 
share its revenue with the contributing entities and should deliver the tape as close to real time 
as technically possible.  

In the MiFID II/MiFIR Review Report on the transparency regime for equity and equity-like 
instruments, the double volume cap mechanism and the trading obligations for shares, ESMA 
has reviewed the MiFIR transparency regime for equity instruments and made proposals for 
targeted amendments. It also includes recommendations on other key transparency provisions, 
in  particular  the  trading  obligation  for  shares  and  the  transparency  provisions  applicable  to 
systematic internalisers in equity instruments.  

In  its Report  on  MiFIR  Review  Report  on  transparency  for  non-equity20,  ESMA  concluded 
that the current regime was too complicated and not always effective in ensuring transparency 
for market participants and made several proposals to improve it: 

 

 

19 

20 

deleting  the  specific  waiver  and  deferral  for  respectively  orders  and  transactions 
above the “size-specific to the instrument” threshold; 

streamlining  the  deferral  regime  with  both  a  simplified  system  based  on  volume 
masking and full publication after two weeks as well as removing the supplementary 
deferral  options  left  to  National  Competent  Authorities  (NCAs)  under  the  current 
MiFIR text; 

ESMA MiFID II/MiFIR Review Report No. 1 on the development in prices for pre- and post-trade data 
and on the consolidated tape for equity instruments, p. 17. 
ESMA MiFID II/MiFIR Review Report on the transparency regime for non-equity instruments and the 
trading obligation for derivatives. 

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 

 

 

 

transforming  the  possibility  granted  to  NCAs  to  temporarily  suspend  MiFIR 
transparency provisions into a mechanism coordinated at EU-level; 

including the possibility  to  suspend at  short notice the application of the  derivative 
trading obligation similarly to the mechanism available in EMIR; and 

complementing the criteria used to grant equivalence to third-country trading venues 
for  the  purpose  of  the  derivative  trading  obligation  with  conditions  relating  to 
transparency and non-discriminatory access. 

Who is affected by the low-performing transparency framework? 

Market participants are expected to adhere to highly complex transparency rules, including 
as  regards  the  application  of  waivers,  deferrals  and  the  double  volume  cap.  This  results  in 
costly administration costs that affect the overall competitiveness of EU platforms and places 
an  undue  burden  on  EU  market  participants.  Streamlining  the  transparency  rules  would 
benefit  the  entire  investment  community  by  increasing  the  availability  of  trading  data  and 
decrease execution costs. It would also result in more price discovery in the Union. 

Data  vendors  already  offer  proprietary  consolidated  version  of  data  from  multiple  sources. 
However, no data vendor has been able to  provide a complete picture of EU trading in  any 
asset  class.  Moreover,  as  data  vendors  interpret  the  data  fields  and  choose  the  venues  they 
incorporate, they differ not only in terms of market coverage, but also on the level of detail 
provided, data tags and will provide different results for the same securities.  

The  cost  of  producing  and  normalising  bad  quality  data  has  led  to  additional  expense  and 
asset and portfolio managers complain that data providers are charging high fees for their 
data feeds.21 As a result it is very costly for all investors and their intermediaries to manage 
their liquidity and trade execution risk throughout the trading day. Investors are also unable to 
hold  their  brokers  accountable  for  whether  they  achieved  best  execution  for  their  trades,  as 
verification  of  the  best  price  currently  requires  a  subscription  to  a  proprietary  market  data 
product  produced  by  a  data  vendor  or  the  proprietary  data  feed  that  each  stock  exchange 
offers for its venue.  

• 

Stakeholder consultations 

On  28  June  2019,  the  Commission  organised  a  workshop  intended  to  engage  with 
stakeholders  about  the  creation  of  an  EU  consolidated  tape,  bringing  together  around  80 
market participants to debate the merits and technical characteristics of an EU CTP, as well as 
the obstacles to its creation. The participants were experts in trading or market data from the 
buy-side, data vendors, trading venues, and on the regulatory side, ESMA and several NCAs. 
Generally, participants of all types agreed that such a tool could be useful, even if there were 
different views as to the optimal characteristics of a tape. 

On  17  February  2020,  DG  FISMA  published  a  public  consultation  on  MiFID/R  review 
intended to gather evidence from stakeholders, and more generally from EU citizens, on the 
overall  functioning  of  the  regime  after  two  years  of  application.  Stakeholders  had  until  18 
May 2020 to express their views via the online EU Survey portal. 458 stakeholders replied to 
the  open  consultation  on  several  topics  including  the  functioning  of  the  transparency 
framework, the consolidated tape, the share and derivative trading obligations, with responses 

21 

EFAMA (2021), Joint statement by EFAMA and EFSA on Consolidated Tape and market data  costs, 
https://www.efama.org/newsroom/news/joint-statement-efama-and-efsa-consolidated-tape-and-market-
data-costs  

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coming  from  sell  side,  buy  side,  trading  venues,  data  providers,  end  users  as  well  as 
regulators. 

Beyond the above, the Commission has been actively studying the issues at hand, mandating 
an extensive study for assessing and defining it ex-ante, with the final goal of supporting an 
informed decision-making process.  

Finally,  the  Commission  staff  has  had  many  bilateral  contacts  with  a  broad  spectrum  of 
stakeholders,  notably  companies  that  specialise  in  the  aggregation  of  market  data,  further 
refining its analysis and policy approach.  

• 

Collection and use of expertise 

The  proposal  builds  on  the  expertise  of  EU  competent  authorities  that  supervise  trading 
venues as well as on the expertise of market operators. In addition, the Commission monitors 
closely  developments  in  other  jurisdictions  (notably  U.S.  and  Canada)  that  have  already 
developed  their  consolidated  tapes  in  the  past,  and  the  possible  changes  that  these 
jurisdictions  are  contemplating  for  their  respective  tapes.  The  Commission  considered  the 
various alternatives and has taken a view on whether these alternatives could be applied to the 
EU situation. 

• 

Impact assessment 

The  Regulatory  Scrutiny  Board  reviewed  the  impact  assessment  that  focussed  on  the 
development of a framework for consolidation of market data.22 Other topics included in the 
proposal were already covered in-depth in the various ESMA reports on the functioning of the 
MiFIR framework which explains why they were not the focus of the impact assessment. 

The impact assessment contains five options to achieve the consolidation of market data:  

Option  1–  Self-aggregation.  Self-aggregators  of  market  data  are  defined  as  market 
participants that collect and consolidate market data for their internal use. Electronic market 
makers (high-frequency trading firms) or big investment banks have the capacity to become 
self-aggregators.  Self-aggregators  will  collect  market  data  from  trading  markets  and 
consolidate  this  data  directly  at  their  own  premises  (decentralised  consolidation).  Upon 
registration  with  ESMA  as  “self-aggregators”,  market  participants  would  be  allowed  to 
collect  all  core  (harmonised)  market  data  and  consolidate  the  information  solely  for  their 
internal use (harmonisation of reporting standards diminishes the cost of data consolidation). 
Self-aggregators would not publish a consolidated tape. In order to avoid complex, individual 
market data licensing arrangements with often hundreds of execution platforms or their APAs 
that  act  as  data  contributors,  all  market  data  sources  would  have  to  make  standardised  core 
market data available to self-aggregators (mandatory contributions).  

Option  2  –  competing  consolidators.  The  competing  consolidator  model  also  takes  a 
decentralised  approach  to  core  market  data  consolidation.  Upon  registration  with  ESMA, 
competing  consolidators  would  be  allowed  to  collect  harmonised  market  data  from  the 
individual data sources (trading venues, APAs) and then consolidate these market data at the 
data centre where its subscribers are located (thus avoiding consolidation at a central hub). A 
decentralised  model  for  data  consolidation  aims  to  address  geographical  dispersion  and 
latency by showing each market data subscriber its local reality. As a result, each subscriber 

22 

The RSB sheet and opinion can be found at: [include link] 

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will  be  able  to  observe  the  best  price  available  from  its  geographical  location.  The 
decentralised  model  aims  to  neutralise  a  common  criticism  made  with  respect  to  a 
consolidated tape: The fact that “best execution” is a local reality, true at one moment, for one 
specific location where the executing broker is located.  

Option 3 – exchange operated consolidators. The exchange-operated consolidator operates a 
centralised "hub and spoke model”. With this approach, each stock exchange would become 
the  exclusive  data  consolidator  with  respect  to  shares  or  other  instruments  listed  on  its 
exchange. The result would be that listing exchanges become the consolidators (the “hub”) for 
all  market  data  that  involve  their  listings  (the  “reportable  securities”).  In  practice,  Option  3 
would lead, e.g., to a separate tape for each European listed exchange (examples are Euronext, 
Deutsche Börse, NASDAQ OMX, BME, Vienna stock exchange, Warsaw stock exchange).  

Option  4  –  single,  independent  consolidator  for  each  asset  class.  The  single  consolidator 
would operate a centralised "hub and spoke model” for each asset class (shares, ETFs, bonds 
and derivatives). With this approach, the exclusive data consolidators would collect data for 
specific stocks from geographically separated venues, consolidate the data in one centralised 
data centre, and then disseminate them from such a central location to subscribers that are in 
other  locations.  Compared  to  a  decentralised  operating  model,  a  centralised  model  would 
therefore be slightly less accurate in terms of the timeliness of the pre-trade quotes provided 
on  the  consolidated  tape  but  it  would  guarantee  more  data  integration  and  operate  a  more 
efficient revenue participation scheme.  

Option 5 – the concentration rule. All trading in listed shares is concentrated on the listing 
exchange  (for  non-equities  on  the  existing  primary  centre  of  liquidity),  there  is  no  need  for 
consolidation  of  core  market  data  with  an  exclusive  or  non-exclusive  securities  market  data 
consolidator. This option would not involve the creation of  a consolidated tape. This option 
would rather aim to consolidate the flow of market data (indirectly) by concentrating trading 
in certain asset classes on designated execution platforms.  

The preferred options for market data consolidation:  

Option 1.2 (competing consolidators) and 1.4 (a single, independent consolidator) constitute 
the  two  preferred  options.  In  terms  of  achieving  optimal  market  data  quality  and  timely 
delivery, the decentralised consolidation model in Option 1.2 enjoys a slight advantage over 
the  centralised  consolidation  (Option  1.4).  On  the  other  hand,  the  competitive  tender  in 
Option 1.4 provides ESMA with more discretion to award the consolidator role to an entirely 
new market entrant. This would allow selection of a consolidator that is entirely independent 
of both market data contributors and market data companies and that operate a more efficient 
revenue participation scheme.  

Option 1.2, on the other hand, would most likely present an opportunity for incumbent market 
data  companies  to  leverage  their  expertise  in  data  aggregation  into  the  new  market  of 
consolidated  data.  While  this  allows  for  ease  of  entry  and  potentially  lower  set-up  and 
operating  cost,  it  entails  the  risk  that  many  of  the  emerging  consolidators  will  be  part  of 
established financial groups and therefore not free of potential conflicts of interest.  

With  respect  to  ensuring  fair  remuneration  of  market  data  contributors,  the  impact 
assessment considered three options: 

Option  2.1  –  Mandatory  contributions  with  “minimum  revenue  targets”  incumbent  on 
market  data  consolidators. All  market  data  sources  would  have  to  make  standardised  core 
market data available to market data aggregators (mandatory contribution). In order to create 

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additional  revenue  for  allocation  to  market  data  contributors,  there  would  be  “minimum 
revenue targets” that form part of the selection process for a single consolidator (Option 1.4) 
or  part  of  the  registration  process  for  competing  consolidators  (Option  1.2). The  minimum 
revenue  targets  would  be  established  and  regularly  reviewed  by  an  independent  operating 
committee. The revenue targets would take into account various uses that subscribers make of 
the  consolidated  tape  and  take  into  account  relevant  parameters  such  as  commercial 
redistribution, price referencing, indexing, syndication, sales of market data to media outlets. 
The  revenue  targets  with  respect  to  professional  users  could  be  set  at  levels  sufficient  to 
largely subsidize the cost of granting retail access for minimal or no cost. 

Option  2.2  –  Mandatory  contributions  with  statutory  subscription  fees.  Option  2.2  would 
comprise  statutory  minimum  subscription  fees  for  consolidated  market  data  feeds.  Making 
mandatory  contributions  contingent  on  a  “revenue  participation  model”  aims  to  create  a 
commonality of interest between market data contributors and market data consolidators. By 
setting fee floors for the use of core market data, market data contributors participate in the 
commercial success of consolidated market data streams and share the risk of success of the 
consolidated market data product with market data consolidators. The subscription fees would 
be designed and regularly reviewed by an independent operating committee.  

Option  2.3  –  Mandatory  contributions with  compensation  by means  of  a  “reference  price 
usage  fee”.  Option  2.3  envisages  to  ensure  compensation  for  market  data  contributors  by 
means of a usage fee for all execution venues that do not contribute to price formation in the 
equity  markets  (“dark  trading”). Technically  “dark  trading”  is  defined  as  a  form  of  trading 
that  is  not  pre-trade  transparent  –  no  quotes  are  published  and  trades  are  executed  at  the 
reference  price  set  at  the  primary  market  execution  platforms  that  match  trades  using  a 
reference  price  “imported”  from  the  listing  exchange.  Users  of  the  reference  price  waiver 
would need to “buy” the reference price by means of a monthly “ad valorem” fee, to be paid 
(for rebating back to the listing exchange) to the operator of the consolidated tape.  

In the end, the preferred option for market data remuneration is Option 2.1 as the least 
intrusive on the consolidator’s business model, while ensuring a revenue stream in line with 
that that can be generated with either Options 2.2 or 2.3. When compared to the complexity of 
setting individual subscription fees centrally, Option 2.1 allows for more commercial freedom 
in establishing and revising subscription fees.  

Overall policy choice on consolidation and fair remuneration 

In  terms  of  achieving  optimal  combination  ensuring  high  market  data  quality  and  timely 
delivery,  the  competitive  tender  process  on  Option  1.4  is  the  most  appropriate  method  to 
ensure  competition  for  the  new  market  of  establishing  the  essential  infrastructure  necessary 
for market data consolidation. On the other hand, many of the positive features of Option 1.2 
can  be  maintained  by,  possibly  at  a  later  stage,  creating  a  new  “downstream”  market  for 
market  data  publication  and  data  advanced  analytics,  a  market  that  is  open  to  competition. 
Revenue participation for market data contributors is best ensured with  Option 2.1 (revenue 
participation model).  

• 

Likely impacts of the preferred option 

The positive impacts of eliminating the obstacles for market data consolidation would accrue 
to investors, the buy-side, in capital markets. The buy-side (i.e. investors in capital markets) 
would  be  the  main  beneficiaries  of  market  data  consolidation  as  a  consolidated  tape  will 
ensure investors and their investment managers get a complete overview of the entire liquidity 
in  any  given  financial  instrument  ultimately  allowing  them  to  take  full  advantage  of  the 
benefits of the single market.  

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By removing barriers to the creation of a consolidated tape, asset and portfolio managers will 
be  incentivised  to  include  in  the  portfolios  they  manage  the  most  optimal  (combination  of) 
instruments available in the Union and not just the instrument available on the (few) venues 
whose  market  data  they  currently  subscribe  to.  They  would  have  the  information  allowing 
them to decide if they need to become member of (other) venues, when these venues provide 
the optimal products for their purpose. It will function as an important guide to the buy-side 
trader  on  assessing  and  making  their  trading  decisions  and  setting  up  their  algorithmic 
parameters. 

The  main  investor  (buy-side  manager)  benefit  of  a  consolidated  tape  is  the  avoidance  of 
liquidity risk and slippage. For equities, 56% of asset managers that participated in a survey 
conducted  by  MSP23  identified  slippage  of  between  0-0.5  basis  points  of  the  annual  traded 
value  as  the  main  consequence  of  a  lack  of  transparency  with  respect  to  liquidity  in  the 
market. Avoidance of this slippage would result in investor gains of up to EUR 1.06 billion.  

For  bonds,  potential  gains  from  a  consolidated  view  of  the  markets  would  be  even  greater. 
This  is  because  the  estimated  losses  due  to  slippage  by  far  exceed  the  above  estimates  for 
shares. 60% of bond asset managers interviewed for the MSP study estimated slippage costs 
of  up  to  5  basis  points,  25%  estimated  slippage  cost  of  up  to  10  basis  points,  while  11% 
estimated  slippage  of  up  to  50  basis  points.  The  absence  of  any  reliable  data  for  the  traded 
value in bonds makes it impossible to quantify slippage in absolute terms. 

Potential benefits are also foreseeable for regulated markets, as the tape will enhance the level 
of  visibility  of  shares,  especially  those  of  SMEs,  listed  on  such  venues  which  will  have  a 
wider  visibility  than  their  own  local  markets  and  a  consequential  increase  in  liquidity.  This 
increased  visibility  increases  the  attractiveness  of  investments  and  the  possibilities  of  the 
shares  being  included  in  investment  funds  or  investment  portfolios.  As  a  consequence  of 
increased attractiveness of SME shares the consolidated tape could therefore also increase the 
effectiveness of raising capital for SMEs.  

• 

Fundamental rights 

The  proposal  respects  the  fundamental  rights  and  observes  the  principles  recognised  by  the 
Charter of Fundamental Rights of the European Union, in particular the principle establishing 
a  high  level  of  consumer  protection  for  all  EU  citizens  (Article  38).  Without  creating  the 
condition  for  a  consolidated  tape  to  be  created  in  the  EU,  retail  clients  would  potentially 
remain without a tool to assess compliance with the best execution rule by their brokers and to 
allow  them  an  increased  range  of  investment  opportunities,  particularly  in  certain  Member 
States where trading venues are smaller and offer fewer investment opportunities. 

4. 

BUDGETARY IMPLICATIONS 

The  initiative  does  not  have  an  impact  on  the  EU  budget.  The  consolidated  tape  will  be 
provided by the private sector, under the  supervision of ESMA. The other elements that the 
proposal tackles do not have an impact on the EU budget either. 

5. 

OTHER ELEMENTS 

Apart from the provisions on consolidation of market data and the operation of consolidated 
tape  providers  for  the  main  MiFIR  asset  classes,  shares,  ETFs,  bonds  and  derivatives,  the 

23 

MSP (2019), The Study on the Creation of an EU Consolidated Tape, Figure 14. 

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proposal contains a series of accompanying measures that aim to strengthen the transparency 
and competitiveness of the Union’s capital markets. 

• 

Implementation plans and monitoring, evaluation and reporting arrangements 

The  proposal  contains  a  monitoring  and  evaluation  of  the  development  of  an  integrated  EU 
market  for  consolidated  market  data.  Monitoring  will  cover  both  the  evolution  of  operating 
models  for  a  consolidated  tape  used  and  the  success  in  facilitating  universal  access  to 
consolidated  market  data  for  the  wider  investor  community.  Particular  focus  of  monitoring 
will  be  on  the  asset  classes  for  which  a  consolidated  tape  has  emerged;  the  timeliness  and 
delivery  quality  of  market  data  consolidation;  the  role  of  market  data  consolidation  in 
reducing implementation  shortfall per asset class;  the number of subscribers to  consolidated 
market data per asset class; the success of revenue allocation models for regulated markets for 
their  contribution  of  market  data  in  shares;  the  effect  of  market  data  consolidation  on 
remedying  information  asymmetries  between  various  capital  market  participants;  and  the 
effect on more democratic access to consolidated market data on investments in SMEs.  

• 

Detailed explanation of the specific provisions of the proposal 

Article  1(1)  amends  certain  aspects  of  the  matter  and  scope  of  the  Regulation,  in  particular 
with regard to the obligation for multilateral systems to operate with a trading venue licence. 

Article  1(2)(a)  are  moving  provisions  on  the  delineation  between  multilateral  and  bilateral 
systems from MiFID II to MiFIR in order to obtain a higher degree of harmonization which 
aims at increasing transparency as a consequence.  

Article  1(2)(b)(c)(d)  contains    new  definitions,  in  particular  the  ones  that  are  essential  for 
market data consolidation, such as the definition of core market data. 

Article  1(3)  proposes  to  institute  a  minimum  threshold  trade  size  for  the  reference  price 
waiver  (RPW)  preventing  any  alternative  trading  venue  (MTFs)  from  executing  small  trade 
sizes under the reference price waiver, in line with ESMA recommendations.  

Article 1(4) replaces the double volume cap with a single volume cap set at 7% of trades that 
are executed under the reference price waiver or the negotiated trade waiver. 

Article 1(6) shortens and harmonises publication deferrals for non-equity post trade reports to 
the public. It also removes the discretion of national competent authorities to allow that post-
trade  reports  for  non-equities  are  deferred  for  four  weeks,  by  replacing  it  with  Union  wide 
thresholds.  Only  with  regard  to  sovereign  debt  the  national  competent  authorities  remain  to 
have discretion. 

Article  1(7)  empowers  ESMA  to  specify  the  content,  format  and  terminology  of  the 
reasonable commercial basis concept, which has been interpreted very differently.  

Articles  1(8)  and  (9)  strengthen  the  public  quoting  obligations  incumbent  on  a  systematic 
internaliser (SI). This new provision increases a SIs pre-trade quotation obligation related to 
equities to cover quotes for trade sizes up to a minimum twice the standard market size. It also 
proposes  to  replicate  the  RPW  floor  to  trades  undertaken  by  an  SI  without  pre-trade 
transparency. In line with the floor on the RPW, SIs will not be allowed to match small trades 
at midpoint.  

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Article  1(10)  introduces  the  obligation  for  trading  venues  to  contribute  harmonised  market 
data  directly  and  exclusively  to  the  entities  appointed  by  ESMA  as  the  CTP  for  each  asset 
class  (mandatory  contributions).  Article  1(10)  also  aligns  the  trade  reporting  formats  and 
reporting  obligations  for  SIs  with  those  applicable  to  exchanges  and  alternative  execution 
venues  (MTFs/OTFs).  This  will  be  achieved  by  means  of  a  delegated  act  that  makes  the 
current  reporting  format  used  by  the  exchanges  (the  Model  Market  Typology  or  ‘MMT’) 
mandatory  for  all  SI  market  data  reports.  In  addition,  Article  1(10)  extends  the  mandate  of 
synchronisation  of  business  clocks  beyond  trading  venues  and  their  members  to  systematic 
internalisers, APAs and CTPs (Article 22c). 

Article  1(11)  codifies  the  perimeter  of  the  share  trading  obligation  (STO).  In  line  with 
ESMA’s  proposals  in  its  Final  report  on  the  transparency  regime  for  equity  instruments, 
following its approach in its statement, this article defines the perimeter of the STO as shares 
that are admitted to trading on an EEA regulated market, and establishes an EU “official list” 
of shares subject to the STO, avoiding current ambiguities in the perimeter of application of 
the STO. 

Articles  1(12),  (13)  and  (14)  introduce  some  technical  changes  in  relation  to  transaction 
reporting and reference data.  

Article  1(15)  introduces  a  selection  procedure  for  the  appointment  of  a  consolidated  tape 
provider for each asset class (shares, ETFs, bonds and derivatives). 

Article 1(16) introduces a provision on the organisational requirements and quality of service 
standards  that  apply  to  all  CTPs  selected  and  appointed  by  ESMA  (Article  27h). 
Requirements for the CTP include: (a) the collection of consolidated core market data; (b) the 
collection  of  licensing  fees  from  subscribers;  and  (c)  for  shares  a  revenue  participation 
scheme for regulated markets for their contribution of market data.  

Article  1(17)  introduces  a  new  Article  27ha  which  contains  a  series  of  public  reporting 
obligations  incumbent  on  the  CTPs.  These  reporting  obligations  concern  service  level 
requirements quality features, e.g., on speed of delivery, and reports on operational resilience. 

Articles  1(18),  (19)  and  (20)  make  adjustment  to  the  derivatives  trading  obligations  in  line 
with  recommendations  made  by  ESMA.  The  trading  obligation  for  counterparties  to  trade 
derivatives  that  are  subject  to  the  clearing  obligation  on  trading  venues  is  triggered  when  a 
class of derivatives is declared to be subject to the clearing obligation.  In light of this close 
interconnection,  the  amendment  aligns  the  derivatives  trading  obligation  under  MiFIR  with 
the clearing obligation for derivatives under ‘EMIR Refit’24, to ensure legal certainty between 
the two obligations, in particular with respect to the scope of the entities that are subject to the 
clearing and trading obligation and the possible suspension of such obligations. Article 1(20) 
introduces  a  new  Article  32a  containing  a  stand-alone  suspension  mechanism  for  the 
Commission to suspend the trading obligation for certain investment firms acting as market-
makers with non-EEA counterparties when certain conditions are met. The mechanism can be 
activated at the request of the competent authority of a Member state and takes the form of an 

24 

Regulation (EU) 2019/834 of the European Parliament and of the Council of 20 May 2019 amending Regulation 
(EU)  No  648/2012  as  regards  the  clearing  obligation,  the  suspension  of  the  clearing  obligation,  the  reporting 
requirements, the risk-mitigation techniques for OTC derivative contracts not cleared by a central counterparty, the 
registration and supervision of trade repositories and the requirements for trade repositories 

EN 

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implementing act  adopted by the Commission.  The suspension needs to  be accompanied by 
evidence that at least one of the conditions for suspension is met.  

Articles  1(21),  (22)  and  (23)  remove  the  “open  access”  obligation  for  exchange-traded 
derivatives.  Clearing  infrastructures  in  the  Union  would  no  longer  be  obliged  to  clear 
derivatives  trades  that  are  not  executed  on  their  vertically  integrated  trading  platform. 
Likewise,  trading  venues  in  the  Union  no  longer  need  to  accept  that  non-affiliated  clearing 
infrastructure clear trades executed on their platform.  

Articles  1(24)  and  1(25)  ensure  that  ESMA  has  sufficient  supervisory  powers  for  the 
consolidated tape providers. 

Article  1(26)  prohibits  SIs  from  offering  payment  for  (retail)  order  flow  (PFOF).  This 
proposal would end the controversial practice that certain high-frequency traders, organised as 
SIs on account of their large transaction volumes, pay retail brokers in exchange for the latter 
channelling their retail  orders to  the high-frequency trader  for execution. The expectation  is 
that,  in  the  absence  of  PFOF,  retail  orders  will  be  sent  to  a  pre-trade  transparent  market 
(regulated  market  or  MTF)  for  execution.  Combined  with  the  increased  pre-trade  quoting 
obligation for SI, these entities would have to “earn” the retail flow by publishing competitive 
pre-trade quotes. On the assumption that retail order flow accounts for anything between 7 to 
10% of overall daily volumes and the expected increase in online brokerage, the prohibition 
of  PFOF  promises  to  increase  execution  quality  for  retail  investors  and  increase  pre-trade 
transparency of all execution platforms that execute retail orders.  

Article  1(27)  empowers  the  Commission  to  adopt  delegating  acts  supplementing  the 
Regulation. 

Article 1(28)(a) tasks ESMA with the obligation to provide monitoring reporting.  

Article  1(28)(b)  and  (29)  delete  a  transitional  measure  and  the  empowerment  for  the 
Commission to adopt delegated acts based on the replaced CTP framework. 

Article 2 provides that entry into force and application occur on the twentieth day following 
that of publication. 

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2021/0385 (COD) 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

amending Regulation (EU) No 600/2014 as regards enhancing market data 
transparency, removing obstacles to the emergence of a consolidated tape, optimising 
the trading obligations and prohibiting receiving payments for forwarding client orders 

(Text with EEA relevance) 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 114 thereof, 

Having regard to the proposal from the European Commission, 

After transmission of the draft legislative act to the national parliaments, 
Having regard to the opinion of the European Central Bank25, 
Having regard to the opinion of the European Economic and Social Committee26,  

Acting in accordance with the ordinary legislative procedure, 

Whereas: 

(1) 

In  its  2020  CMU  Action  Plan27,  the  Commission  announced  its  intention  to  table  a 
legislative  proposal  to  create  a  centralised  data  base  which  was  meant  to  provide  a 
comprehensive  view  on  prices  and  volume  of  equity  and  equity-like  financial 
instruments  traded  throughout  the  Union  across  a  multitude  of  trading  venues 
(‘consolidated  tape’).  On  2  December  2020,  in  its  conclusion  on  the  Commission’s 
CMU  Action  Plan28,  the  Council  encouraged  the  Commission  to  stimulate  more 
investment  activity inside the Union by  enhancing data availability  and transparency 
by further assessing how to tackle the obstacles to establishing a consolidated tape in 
the Union. 

(2) 

In its roadmap on ‘The European economic and financial system: fostering openness, 
strength and resilience’ of 19 January 202129, the Commission confirmed its intention 
to  improve,  simplify  and  further  harmonise  capital  markets’  transparency,  as  part  of 
the review of Directive 2014/65/EU of the European Parliament and of the Council30 

25 
26 
27 
28 

29 
30 

OJ C […], […], p. […]. 
OJ C […], […], p. […]. 
COM/2020/590 final.  
Council Conclusions on the Commission’s CMU Action Plan, 12898/1 of /20 REV 1 EF 286 ECOFIN 
1023: https://data.consilium.europa.eu/doc/document/ST-12898-2020-REV-1/en/pdf;  
COM/2021/32 final.  
Directive  2014/65/EU  of  the  European  Parliament  and  of  the  Council  of  15  May  2014 on  markets  in 
financial  instruments  and  amending  Directive  2002/92/EC  and  Directive  2011/61/EU  (OJ  L  173, 
12.6.2014, p. 349). 

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(3) 

(4) 

(5) 

and of Regulation  (EU)  No 600/2014 the European Parliament and of the Council31. 
As part of efforts to strengthen the international role of the Euro, the Commission also 
announced  that  such  reform  would  include  the  design  and  implementation  of  a 
consolidated tape, in particular for corporate bond issuances to increase the liquidity of 
secondary trading in euro-denominated debt instruments.  
Regulation  (EU)  No  600/2014  of  the  European  Parliament  and  of  the  Council32 
provides for a legislative framework for ‘consolidated tape providers’ or ‘CTPs’, both 
for  equity  and  non-equity.  Those  CTPs  are  currently  responsible  for  collecting  from 
trading  venues  and  approved  publication  arrangements  (‘APAs’)  market  data  about 
financial  instruments  and  consolidating  those  data  into  a  continuous  electronic  live 
data stream, which provides market data per financial instrument. The idea behind the 
introduction of a CTP was that market data from trading venues and APAs would be 
made  available  to  the  public  in  a  consolidated  manner,  including  all  of  the  Union’s 
trading markets, using identical data tags, formats and user interfaces. 

To date, however, no supervised entity has applied for authorisation to act as a CTP. 
ESMA  has  identified  three  main  obstacles  that  have  prevented  supervised  entities  to 
apply  for  registration  as  a  CTP33.  First,  a  lack  of  clarity  as  to  how  the  CTP  is  to 
procure  market  data  from  the  various  execution  venues  or  from  the  data  reporting 
service providers concerned. Second, insufficient quality in terms of harmonisation of 
the data reported by those execution venues to allow for a cost-efficient consolidation. 
Third,  a  lack  of  commercial  incentives  to  apply  for  authorisation  as  a  CTP.  It  is 
therefore  necessary  to  remove  those  obstacles.  Such  removal  requires,  first,  that  all 
trading  venues  and  systematic  internalisers  (‘SIs’)  provide  CTPs  with  market  data 
(provision  rule).  It  secondly  requires  an  improvement  of  the  data  quality  by 
harmonising the data reports that trading venues and SIs should submit to the CTP. 
Article 1(7) of Directive 2014/65/EU of the European Parliament and of the Council34 
requires operators of systems in which multiple third-party buying and selling trading 
interests in financial instruments are able to interact (‘multilateral systems’) to operate 
in  accordance  with 
the  requirements  concerning  regulated  markets  (‘RMs’), 
multilateral  trading  facilities  (‘MTFs’),  or  organised  trading  facilities  (‘OTFs’).  The 
placement  of  that  requirement  in  Directive  2014/65/EU  has  left  room  for  varying 
interpretations of that requirement, which has led to an uneven playing field between 
multilateral  systems  that  are  licensed  as  an  RM,  MTF  or  OTF,  and  multilateral 
systems that are not licensed as such. In order to ensure a uniform application of that 
requirement, it should be introduced in Regulation (EU) No 600/2014. 

(6) 

Article 4 of Regulation (EU) No 600/2014 allows competent authorities to waive the 
pre-trade  transparency  requirements  for  market  operators  and  investment  firms 
operating  a  trading  venue  who  determine  their  prices  by  reference  to  the  midpoint 

31 

32 

33 

34 

Regulation  (EU)  No  600/2014  of  the  European  Parliament  and  of  the  Council  of  15  May  2014  on 
markets  in  financial  instruments  and  amending  Regulation  (EU)  No  648/2012  (OJ  L  173,  12.6.2014, 
p. 84). 
Regulation  (EU)  No  600/2014  of  the  European  Parliament  and  of  the  Council  of  15  May  2014  on 
markets  in  financial  instruments  and  amending  Regulation  (EU)  No  648/2012  (OJ  L  173,  12.6.2014, 
p. 84). 
ESMA MiFID II/MiFIR Review Report No. 1 on the development in prices for pre- and post-trade data 
and on the consolidated tape for equity instruments. 
Directive  2014/65/EU  of  the  European  Parliament  and  of  the  Council  of  15  May  2014 on  markets  in 
financial  instruments  and  amending  Directive  2002/92/EC  and  Directive  2011/61/EU  (OJ  L  173, 
12.6.2014, p. 349). 

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(7) 

(8) 

price of the primary market or the most relevant market in terms of liquidity. As there 
is no justification for excluding the smallest orders from a transparent order book and 
in  order  to  increase  pre-trade  transparency  and  thereby  reinforce  the  price  formation 
process, that waiver should be applicable to orders with a size greater than or equal to 
twice the standard market size. Where the consolidated tape for shares and exchange-
traded funds (ETFs)  will provide bid  and offer prices  from  which a midpoint can be 
derived, the  reference price waiver should also  be available for systems  deriving the 
midpoint price from the consolidated tape.  

Dark  trading  is  trading  without  pre-trade  transparency,  using  the  reference  price 
waiver  laid  down  in  Article  4(1),  point (a)  of  Regulation  (EU)  No 600/2014  and  the 
negotiated trade waiver laid down in Article 4(a) point (a), point (i) of that Regulation. 
The use of both waivers is capped by the double volume cap (‘DVC’). The DVC is a 
mechanism that limits the level of dark trading to a certain proportion of total trading 
in  an  equity  instrument.  The  amount  of  dark  trading  in  an  equity  instrument  on  an 
individual venue may not exceed 4% of total trading in that instrument in the Union. 
When  this  threshold  is  breached,  dark  trading  in  that  instrument  on  that  venue  is 
suspended. Secondly the amount of dark trading in an equity instrument in the Union 
may  not  exceed  8%  of  total  trading  in  that  instrument  in  the  Union.  When  this 
threshold  is  breached  all  dark  trading  in  that  instrument  is  suspended.  The  venue 
specific threshold leaves room for continued use of those waivers on other platforms 
on which trading in that equity instrument is not yet suspended, until the Union wide 
threshold is breached. This causes complexity in terms of monitoring the levels of dark 
trading  and  of  enforcing  the  suspension.  To  simplify  the  double  volume  cap  while 
keeping  its  effectiveness,  the  new  single  volume  cap  should  rely  solely  on  the  EU-
wide threshold. That threshold should be lowered to 7 % to compensate for a potential 
increase  of  trading  under  those  waivers  as  a  consequence  of  abolishing  the  venue 
specific threshold.  

Article 10 of Regulation (EU) No 600/2014 contains requirements for trading venues 
to publish information related to transactions in non-equity instruments, including the 
price and the volume. Article 11 of that Regulation contains the grounds for national 
competent  authorities  to  allow  for  delayed  publication  of  those  details.  Deferred 
publication of those details is allowed where a transaction is above the large in scale 
(‘LIS’) size threshold and is in an instrument for which there is no liquid market, or 
where that transaction is above the size specific to the instrument threshold in case the 
transaction 
liquidity  providers.  National  competent  authorities  have 
discretion in the duration of the deferred period and in the details of the transactions 
that may be deferred. That discretion has led to differing practices among the member 
states and to ineffective post-trade transparency publications. To ensure transparency 
towards all types of investors, it is necessary to harmonise the deferral regime at the 
level of the European Union, remove discretion at national level and facilitate market 
data  consolidation.  It  is  therefore  appropriate  to  reinforce  post-trade  transparency 
requirements by removing the discretion for competent authorities.  

involves 

(9) 

To  ensure  an  adequate  level  of  transparency,  the  price  of  a  non-equity  transaction 
should  be  published  as  close  to  real  time  as  possible  and  only  be  delayed  until 
maximally  the  end  of  the  trading  day.  However,  in  order  not  to  expose  liquidity 
providers  in  non-equity  instruments  to  undue  risk,  it  should  be  possible  to  mask 
volumes  of  transactions  for  a  short  period  of  time,  which  should  not  be  longer  than 
two  weeks.  The  exact  calibration  of  the  various  buckets  corresponding  to  different 
time  deferrals  should  be  left  to  ESMA  due  to  the  technical  expertise  required  to 

EN 

19 

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specify the calibration as well as due to the need to allow for the flexibility to amend 
the  calibration.  Those  deferrals  should  be  based  on  the  liquidity  of  the  non-equity 
instrument, the size of the transaction and, for bonds, the credit rating and it should no 
longer include the size specific to the instrument concerned.  

(10)  Article 13 of Regulation (EU) No 600/2014 requires market operators and investment 
firms  operating  a  trading  venue  to  make  the  pre-trade  and  post-trade  information  on 
transactions  in  financial  instruments  available  to  the  public  on  a  reasonable 
commercial  basis  (‘RCB’),  and  to  ensure  non-discriminatory  access  to  that 
information.  That  Article  has,  however,  not  delivered  on  its  objectives.  The 
information  provided  by  trading  venues,  APAs  and  systematic  internalisers  on  a 
reasonable commercial basis does not enable users to understand market data policies 
and how the price for market data is set. ESMA issued guidelines explaining how the 
concept  of  RCB  should  be  applied.  These  guidelines  should  be  converted  to  legal 
obligations. Due to the high level of detail required to specify RCB and the required 
flexibility in amending the applicable rules based on the fast changing data landscape, 
ESMA  should  be  empowered  to  develop  draft  regulatory  technical  standards 
specifying how RCB should be applied, thereby further strengthening the harmonised 
and consistent application of Article 13 of Regulation (EU) No 600/2014. 

(11) 

(12) 

In order to reinforce the price formation process and to maintain a level playing field 
between  trading  venues  and  systematic  internalisers,  Article  14  of  Regulation  (EU) 
No 600/2014  requires  systematic  internalisers  to  make  public  all  quotes  in  equity 
instruments  placed  by  that  systematic  internaliser  below  the  standard  market  size. 
Systematic  internalisers  are  free  to  decide  which  sizes  they  quote,  as  long  as  they 
quote  at  a  minimum  size  of  10%  of  the  standard  market  size.  That  possibility, 
however, has led to very low levels of pre-trade transparency provided by systematic 
internalisers  in  equity  instruments,  and  has  hampered  the  achievement  of  a  level 
playing  field.  It  is  therefore  necessary  to  require  systematic  internalisers  to  publish 
firm quotes relating to a minimum of twice the standard market size.  

In  order  to  create  a  level  playing  field,  in  addition  to  the  obligation  to  publish  firm 
quotes  relating  to  a  minimum  of  twice  the  standard  market  size,  systematic 
internalisers  should  also  no  longer  be  allowed  to  match  at  midpoint  below  twice  the 
standard  market  size.  It  should  furthermore  be  clarified  that  systematic  internalisers 
should  be  allowed  to  match  at  midpoint  in  so  far  as  they  comply  with  the  tick-size 
rules  in  accordance  with  Article  49  of  Directive  2014/65/EU  when  they  trade  above 
twice the standard market size but below the large in-scale threshold. When systematic 
internalisers trade above a large in-scale threshold, they should continue to be allowed 
to match at midpoint without complying with the tick-size regime. 

(13)  Market  participants  need  core  market  data  to  be  able  to  make  informed  investment 
decisions. Pursuant to the current Article 27h of Regulation (EU) 600/2014, sourcing 
core market data about certain financial instruments directly from trading venues and 
APAs  requires  that  consolidated  tape  providers  enter  into  separate  licensing 
agreements  with  all  those  data  contributors.  That  process  is  burdensome,  costly  and 
time  consuming.  It  has  been  one  of  the  obstacles  to  consolidated  tape  providers 
emerging on a cross market basis. This obstacle should be removed in order to enable 
consolidated  tape  providers  to  obtain  the  market  data  and  to  overcome  licencing 
issues.  Trading  venues  and  APAs,  or  investment  firms  and  systematic  internalisers 
without  intervention  of  APAs  (‘market  data  contributors’)  should  be  required  to 
submit  their  market  data  to  consolidated  tape  providers,  and  to  use  harmonised 
templates  respecting  high–quality  data  standards  to  do  so.  Only  CTPs  selected  and 

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authorised  by  ESMA  should  be  able  to  collect  harmonised  market  data  from  the 
individual data sources in accordance with the mandatory contribution rule. To make 
the  market  data  useful  for  investors,  market  data  contributors  should  be  required  to 
provide the CTP with market data as close as technically possible to real time.  

(14)  Title II and III of Regulation (EU) 600/2014 require trading venues, APAs, investment 
firms and systematic internalisers (‘market data contributors’) to publish pre-trade data 
on  financial  instruments,  including  bid  and  offer  prices  and  post-trade  data  on 
transactions,  including  the  price  and  volume  at  which  a  transaction  in  a  specific 
instrument  has  been  concluded.  Market  participants  are  not  obliged  to  use  the 
consolidated core market data provided by the CTP. The requirement to publish those 
pre-trade  and  post-trade  data  should  therefore  remain  applicable  to  enable  market 
participants  to  access  market  data.  However,  to  avoid  undue  burden  on  market  data 
contributors, it is appropriate to align the requirement for market data contributors to 
publish data as much as possible with the requirement to contribute data to the CTP.  

(15)  Due  to  the  disparate  quality  of  market  data,  it  is  difficult  for  market  participants  to 
compare  those  data,  which  devoids  data  consolidation  of  much  added-value.  It  is  of 
the utmost importance for the proper functioning of the transparency regime set out in 
Title  II  and  III  of  Regulation  (EU)  600/2014  and  for  the  consolidation  of  data  by 
consolidated  tape  providers  that  market  data  are  of  high  quality.  It  is  therefore 
appropriate  to  require  that  those  market  data  comply  with  high  quality  standards  in 
terms of both substance and format. It should be possible to change the substance and 
the format of the data within a short time to allow for changing market practices and 
insights.  Therefore  the  requirements  for  the  quality  of  data  should  specified  by  the 
Commission in a Delegated Act and should take into account the advice of a dedicated 
consultative group, composed of experts from the industry and from public authorities.  

(16)  To  better  monitor  reportable  events,  Directive  2014/65/EU  harmonised 

the 
synchronisation  of  business  clocks  for  trading  venues  and  their  members.  To  ensure 
that,  in  the  context  of  the  consolidation  of  market  data,  timestamps  reported  by 
different  entities  can  be  compared  meaningfully,  it  is  appropriate  to  extend  the 
requirements for harmonisation of the synchronisation of business clocks to systematic 
internalisers,  APAs  and  consolidated  tape  providers.  Due  to  the  level  of  technical 
expertise  required  to  specify  the  requirements  for  application  of  a  synchronized 
business  clock,  ESMA  should  be  empowered  to  develop  draft  regulatory  technical 
standards to specify the accuracy with which the clocks should be synchronized.  

(17)  Article  23  of  Regulation  (EU)  No 600/2014  requires  that  the  majority  of  trading  in 
shares  takes  place  on  trading  venues  or  systematic  internalisers  (‘share  trading 
obligation’).  This  requirement  does  not  apply  to  trades  in  shares  which  are  non-
systematic,  ad  hoc  or  irregular  and  infrequent.  It  is  not  clear  when  this  exemption 
applies. ESMA therefore clarified this by making a distinction between shares on the 
basis  of  their  International  Securities  Identification  Number  (ISIN).  Pursuant  to  that 
distinction, only shares with an EEA ISIN are subject to the share trading obligation. 
That approach provides clarity to market participants trading in shares. It is therefore 
appropriate to incorporate ESMA’s current practice in Regulation (EU) No 600/2014, 
while  simultaneously  removing  the  exemption  for  trades  in  shares  which  are  non-
systematic, ad-hoc or irregular and infrequent. In order to provide market participants 
with  certainty  on  which  instruments  fall  under  the  share-trading  obligation,  ESMA 
should be empowered to publish and maintain a list containing all the shares subject to 
that obligation. 

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(18)  Determination  of  the  date  by  which  transactions  are  reported  is  important  to  ensure 
sufficient preparedness by both supervisors and reporting entities. It is also crucial to 
align  the  timing  of  changes  in  different  reporting  frameworks.  Setting  this  date  in  a 
delegated act will provide the necessary flexibility and aligns ESMA’s empowerments 
with  those  laid  down  in  Regulation  (EU)  2019/834.  To  increase  overall  market 
reporting consistency, ESMA should also take account of international developments 
and  standards  agreed  upon  at  Union  or  global  level  when  developing  relevant  draft 
regulatory technical standards. 

(19)  Reporting in financial markets – in particular transaction reporting – is already highly 
automated and data is  more standardised. Some inconsistencies between  frameworks 
have already been resolved in the European Market Infrastructure Regulation (EMIR) 
Refit  and  Securities  Financing  Transactions  Regulation  (SFTR).  The  empowerments 
for  ESMA  should  be  aligned  to  adopt  technical  standards  and  ensure  greater 
consistency 
the  EMIR,  SFTR  and  MiFIR 
frameworks.  This  will  improve  transaction  data  quality  and  avoid  unnecessary 
additional costs for the industry.  

transaction  reporting  between 

in 

(20)  Competition  among consolidated tape providers  ensures that the consolidated tape is 
provided in the most efficient way and under the best conditions for users. However, 
no  entity  has,  up  until  now,  applied  to  act  as  a  consolidated  tape  provider.  It  is 
therefore  considered  appropriate  to  empower  ESMA  to  periodically  organise  a 
competitive selection procedure to  select  a single entity  which is  able to provide the 
consolidated tape for each specified asset class. Taking into account the novelty of the 
the  provision  of  post-trade 
proposed  scheme,  ESMA  should  only  mandate 
transparency data for the first selection procedure that it runs in relation to shares. At 
least  18  months  before  the  launch  of  the  second  selection  procedure,  ESMA  should 
submit  a  report  to  the  Commission  assessing  whether  there  is  market  demand  for 
extending  the  data  contributed  to  the  tape  to  pre-trade  data.  On  the  basis  of  such  a 
report,  the  Commission  should  be  empowered,  by  way  of  a  delegated  act,  to  further 
specify the depth of pre-trade data to the tape.  

(21)  According to data presented in the impact assessment accompanying the proposal for 
this  Regulation,  the  expected  revenue  generation  for  the  consolidated  tape  will  vary 
depending on the precise features of the tape. The expected revenue of the CTP should 
significantly  exceed  the  cost  of  its  production  and  therefore  help  to  build  a  solid 
revenue participation scheme whereby the CTP and the market data contributors share 
aligned commercial interests. This principle should not prevent CTPs from making a 
necessary margin to maintain a viable business model and from using the core market 
data to offer further analytics or other services aimed to increase the revenue pool. 

(22)  There  is  an  objective  difference  between  a  venue  of  primary  admission  and  other 
trading venues that serve as secondary trading markets. A venue of primary admission 
admits companies to the public markets, playing a crucial role in the life of a share and 
for the share’s liquidity. This is particularly true in the case of shares listed on smaller 
regulated  markets  which  remain  typically  traded  mostly  on  the  venue  of  primary 
admission.  When  the  pre-trade  transparent  trading  of  a  certain  share  takes  place 
exclusively or predominantly on the venue of primary admission, such smaller venue 
plays a more important role in the price formation for that share. The core market data 
a smaller regulated market contributes to the consolidated tape therefore plays a more 
determining role in the price formation for the shares this venue admits to trading. A 
preferential  treatment  in  the  revenue  participation  scheme  is  therefore  considered 
appropriate  to  allow  these  smaller  exchanges  to  maintain  their  local  admissions  and 

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safeguard  a  rich  and  vibrant  ecosystem  in  line  with  the  objectives  of  the  Capital 
Markets Union.  

(23)  Small regulated markets are regulated markets which admit shares of issuers for which 
trading  in  the  secondary  market  tends  to  be  less  liquid  than  the  trading  of  shares 
admitted  to  trading  on  larger  regulated  markets. In  order  to  avoid  that  lower  trading 
volumes (or nominal  values) penalise smaller  exchanges in  the revenue  participation 
scheme  designed  for  the  consolidated  tape  for  shares,  data  from  trades  in  these  less 
liquid  shares  should  attract  a  higher  remuneration  than  their  notional  trading  value 
would indicate. Whether a share is less liquid should be determined on the basis of the 
proportion  of  pre-trade  transparent  liquidity  displayed  by  the  regulated  market  that 
admits the less liquid share, relative to the average daily trading turnover in that share. 

(24)  Given the novelty of the consolidated tape in the context of the EU financial markets, 
ESMA  should  be  entrusted  with  providing  the  European  Commission  with  an 
assessment of the revenue participation scheme designed for regulated markets in the 
context of the consolidated tape for shares. This report should be prepared on the basis 
of at least 12 months of operation of the CTP and subsequently at the request of the 
Commission, where deemed necessary or appropriate. The assessment should focus in 
particular on whether the participation of small regulated markets in the revenue of the 
CTP is fair and effective in safeguarding the role that these markets play in their local 
financial ecosystem. The Commission should be empowered to revise the mechanism 
of allocation by way of a delegated act, where necessary or appropriate. 

(25) 

It  is  necessary  to  ensure  that  consolidated  tape  providers  remedy  information 
asymmetries  in  the  capital  markets  in  a  sustainable  manner,  and  to  ensure  that 
consolidated  tape  providers  provide  consolidated  data  that  are  reliable.  Consolidated 
tape  providers  should  therefore  be  obliged  to  adhere  to  organisational  requirements 
and  quality  of  service  standards  that  must  be  met  at  all  times  once  they  have  been 
authorised by ESMA. Quality standards should cover aspects related to the collection 
of consolidated core market data, accurate time-stamping of such data at various stages 
in  the  delivery  chain,  collection  and  administration  of  market  data  subscription  fees, 
and allocation of revenue to market data contributors. 

(26) 

In  order  to  safeguard  market  participants’  continued  trust  in  the  operation  of  a 
consolidated  tape  provider,  such  entities  should  periodically  make  a  series  of  public 
reports  concerning  compliance  with  their  obligations  under  this  Regulation,  in 
particular  on  performance  statistics  and  incident  reports  relating  to  data  quality  and 
systems.  Due  to  the  highly  technical  nature  of  the  substance  of  the  report,  ESMA 
should be empowered to specify the substance, format and timing.  

(27)  The  requirement  that  trade  reports  should  be  made  available  free  of  access  charges 
after 15 minutes  currently  applies  to  all trading venues, APAs and CTPs. For CTPs, 
that  requirement  stands  in  the  way  of  commercialising  the  consolidation  of  the  core 
market data and considerably limits the commercial viability of a potential CTP, since 
certain potential clients could prefer waiting for the consolidated free data rather than 
subscribing  to  the  consolidated  tape.  This  is  in  particular  the  case  for  bonds  and 
derivatives that are in  general not traded frequently and for which  the data has often 
kept most of its value after 15 minutes. While the requirement to deliver the data for 
free after 15 minutes should remain in place for trading venues and APAs, it should be 
abandoned for CTPs to protect its potential business model.  

(30)  Article  28  of  Regulation  (EU)  No  600/2014  requires  that  OTC  derivatives  that  are 
subject  to  the  clearing  obligation  are  traded  on  trading  venues.  Regulation  (EU) 

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2019/834 of the European Parliament and of the Council35 amended Regulation (EU) 
No 648/2012 of the European Parliament and of the Council36 to reduce the scope of 
the  entities  that  are  subject  to  the  clearing  obligation.  In  light  of  the  close 
interconnection between the clearing obligation under Regulation (EU) 648/2012 and 
the  derivatives  trading  obligation  under  Regulation  (EU)  600/2014,  and  to  ensure 
greater  legal  coherence  and  to  simplify  the  legal  framework,  it  is  necessary  and 
appropriate  to  re-align  the  derivatives  trading  obligation  with  the  clearing  obligation 
for  derivatives.  Without  that  alignment,  certain  smaller  financial  counterparties  and 
non-financial  counterparties  would  no  longer  be  captured  by  the  clearing  obligation 
but continue to be captured by the trading obligation. 

(31)  Article 6a of Regulation (EU) No 648/2012 provides for a mechanism to temporarily 
suspend the clearing obligation where the criteria on the basis of which specific classes 
of  OTC  derivatives  have  been  made  subject  to  the  clearing  obligation  are  no  longer 
met,  or  where  such  suspension  is  considered  necessary  to  avoid  a  serious  threat  to 
financial stability in the Union. Such suspension may, however, prevent counterparties 
from being able to comply with their trading obligation, laid down in Regulation (EU) 
600/2014 because the clearing obligation is a pre-requisite to the trading obligation. It 
is therefore necessary to lay down that, where the suspension of the clearing obligation 
would lead to a material change in the criteria for the trading obligation, it should be 
possible to concurrently suspend the trading obligation for the same class or classes of 
OTC derivatives that are subject to the suspension of the clearing obligation.  

(32)  An  ad-hoc  suspension  mechanism  is  necessary  to  ensure  that  the  Commission  may 
swiftly  react  to  significant  changes  in  market  conditions  that  may  have  a  material 
effect  on  the  trading  of  derivatives  and  their  counterparties.  Where  such  market 
conditions are present, and upon the request of the competent authority of a Member 
state, the Commission should be able to suspend the trading obligation, independently 
from  any  suspension  of  the  clearing  obligation.  Such  a  suspension  of  the  trading 
obligation  should  be  possible  where  the  activities  of  an  EU  investment  firm  with  a 
non-EEA counterparty are unduly affected by the  scope of the EU trading obligation 
on derivatives and where that investment firm acts as a market-maker in the category 
of  derivatives  subject  to  the  trading  obligation.  The  issue  of  overlapping  DTOs  is 
particularly  acute  when  trading  with  counterparties  domiciled  in  a  third-country 
jurisdiction  that  applies  its  own  DTO.  This  suspension  would  also  help  EU 
counterparties  remaining  competitive  on  global  markets.  When  deciding  upon  the 
suspension  of  the  trading  obligation,  the  Commission  should  take  into  consideration 
the impact of such suspension on the clearing obligation laid down in Regulation (EU) 
No 648/2012. 

(33)  Open access provisions for exchange-traded derivatives reduce attractiveness to invest 
in  new  products  as  competitors  may  be  able  to  get  access  without  the  upfront 
investment.  The  application  of  the  open  access  regime  for  exchange-traded 
derivatives, laid down in Article 35 and 36 of Regulation (EU) No 600/2014, may thus 

35 

36 

Regulation (EU) 2019/834 of the European Parliament and of the Council of 20 May 2019 amending 
Regulation  (EU)  No  648/2012  as  regards  the  clearing  obligation,  the  suspension  of  the  clearing 
obligation, the reporting requirements, the risk-mitigation techniques for OTC derivative contracts not 
cleared  by  a  central  counterparty,  the  registration  and  supervision  of  trade  repositories  and  the 
requirements for trade repositories (OJ L 141, 28.5.2019, p. 42). 
Regulation (EU) No 648/2012 of the European Parliament and of the Council of 4 July 2012 on OTC 
derivatives, central counterparties and trade repositories (OJ L 201, 27.7.2012, p. 1). 

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limit competitiveness in these products, by removing incentives for regulated markets 
to  create new exchange-traded derivatives.  It  should  therefore be laid down that that 
regime  should  not  apply  to  the  CCP  or  trading  venue  concerned  in  respect  of 
exchange-traded  derivatives,  thus  fostering  innovation  and  the  development  of 
exchange-traded derivatives in the Union.  

(34)  Financial intermediaries should strive to achieve the best possible price and the highest 
possible likelihood of execution for trades that they execute on behalf of their clients. 
To  that  end,  financial  intermediaries  should  select  the  trading  venue  or  counterparty 
for executing their client trades solely on the basis of achieving best execution for their 
clients. It should be incompatible with that principle of best execution that a financial 
intermediary receives a payment from a trading counterpart in exchange for ensuring 
the execution of client trades. Investment firms should be therefore be prohibited from 
receiving such payment. 

(35)  The  Commission  should  adopt  the  draft  regulatory  technical  standards  developed  by 
ESMA  regarding  the  precise  characteristics  of  the  deferral  regime  for  non-equity 
transactions, regarding the provision of information on a reasonable commercial basis, 
regarding  the  application  of  the  synchronised  business  clocks  by  trading  venues, 
systematic  internalisers,  APAs  and  CTPs  and  regarding  characteristics  of  the  public 
reporting obligation of the CTP. The Commission should adopt those draft regulatory 
technical standards by means of delegated acts pursuant to Article 290 TFEU and in 
accordance with Articles 10 to 14 of Regulation (EU) No 1093/2010. 

(36)  Since  the  objectives  of  this  Regulation,  namely  to  facilitate  the  emerging  of  a 
consolidated tape provider cross  markets  for  each asset classes and to  amend certain 
aspects  of  the  existing  legislation  in  order  to  improve  transparency  on  markets  in 
financial  instruments  but  also  to  further  enhance  the  level  playing  field  between 
regulated markets and systematic internalisers, cannot be sufficiently achieved by the 
Member States, but can rather, by reason of its scale and effects, be better achieved at 
the  Union  level,  measure  should  be  adopted  at  Union  level,  in  accordance  with  the 
principle  of  subsidiarity  as  set  out  in  Article  5  of  the  Treaty  on  European  Union.  In 
accordance  with  the  principle  of  proportionality,  as  set  out  in  that  Article,  this 
Regulation does not go beyond what is necessary in order to achieve those objectives. 
This  Regulation  furthermore  respects  the  fundamental  rights  and  observes  the 
principles  recognised  in  the  Charter,  in  particular  the  freedom  to  conduct  a  business 
and the right to consumer protection, 

HAVE ADOPTED THIS REGULATION: 

Article 1 
Amendments to Regulation (EU) No 600/2014 

(1) 

Article 1 is amended as follows: 

(a) 

in paragraph 1, the following point (i) is added: 

(h) 

the scope of multilateral trading.’; 

(b)  paragraph 3 is replaced by the following: 

‘3. 
Title V of this Regulation shall also apply to all financial counterparties 
referred  to  in  Article 4a(1),  second  subparagraph,  of  Regulation  (EU)  No 
648/2012  and  to  all  non-financial  counterparties  referred  to  in  Article  10(1), 
second subparagraph, of that Regulation.’; 

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25 

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(c) 

the following paragraph 7a is inserted: 

‘7a.  All  multilateral  systems  shall  operate  either  in  accordance  with  the 
provisions of Title II of  Directive 2014/65/EU concerning MTFs or OTFs, or 
the provisions of Title III of that Directive concerning regulated markets. 

All  investment  firms  which,  on  an  organised,  frequent,  systematic  and 
substantial basis, deal on own account when executing client orders outside a 
regulated market, an MTF or an OTF shall operate in accordance with Title III 
of this Regulation. 

Without  prejudice  to  Articles  23  and  28,  all  investment  firms  concluding 
transactions  in  financial  instruments  which  are  not  concluded  on  multilateral 
systems or systematic internalisers shall comply with Articles 20, 21, 22, 22a, 
22b and 22c, of this Regulation.’; 

(2) 

in Article 2, paragraph 1 is amended as follows: 

(a) 

point (11) is replaced by the following: 

‘(11) 
‘multilateral  system’  means  any  system  or  facility  in  which  multiple 
third-party buying and selling trading interest in financial instruments are able 
to interact in the system;’; 

(b) 

the following point (34a) is inserted: 

‘(34a)  ‘market  data  contributor’  means  a  trading  venue,  an  investment  firm, 
including systematic internalisers, or an APA;’; 

(c) 

point (35) is replaced by the following: 

‘(35) 
‘consolidated  tape  provider’  or  ‘CTP’  means  a  person  authorised  in 
accordance with Title IVa, Chapter 1 of this Regulation to provide the service 
of collecting market data for shares, ETFs, bonds or derivatives, from market 
data contributors, and of consolidating those data into a continuous electronic 
live data stream providing core market data per share, ETF, bond or derivatives 
and of providing them to user of market data;’; 

(d) 

the following points (36b) and (36c) are inserted: 

(36b) 

‘core market data’ means: 

(a) 

all of the following data on equities: 

(i) 

the best bids and offers with corresponding volumes; 

(ii) 

the transaction price and volume executed at the stated price; 

(iii) 

the intra-day auction information; 

(iv) 

the end-of-day auction information; 

(v) 

the market identifier code identifying the execution venue; 

(vi) 

the standardised instrument identifier that applies across venues; 

(vii)  the timestamp information on all of the following: 

- 

- 

- 

the time of execution of the trade; 

the time of publication of the trade; 

the receipt of market data from the market data contributors; 

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26 

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- 

- 

the receipt of market data by the consolidated tape provider; 

the dissemination of consolidated market data to subscribers; 

(viii)  the trading protocols and the applicable waivers or deferrals; 

(b) 

all of the following data on non-equities: 

(i) 

the transaction price and quantity/size executed at the stated price; 

(ii) 

the market identifier code identifying the execution venue; 

(iii)  standardised instrument identifier that applies across venues; 

(iv) 

the timestamp information on all of the following: 

- 

- 

- 

the time of execution of the trade; 

the time of publication of the trade; 

the receipt of market data from the market data contributors; 

the 

data 
- 
aggregation/consolidation mechanism; 

of  market 

receipt 

at 

the 

consolidator’s 

- 

the dissemination of consolidated market data to subscribers; 

(v) 

the trading protocols and the applicable waivers or deferrals; 

(36c) 
‘regulatory data’ means  data related to the status of  systems matching 
orders  in  financial  instruments,  including  information  about  circuit  breakers, 
trading halts, and opening and closing prices of those financial instruments;’ 

(3) 

Article 4 is amended as follows: 

(a) 

paragraph 1 is amended as follows: 

(i) 

point (a) is replaced by the following: 

‘(a)  systems  matching  orders  that  are  larger  than  twice  the  standard 
market size and that are based on a trading methodology by which 
the  price  of  the  financial  instruments  referred  to  in  Article  3(1)  is 
derived from either of the following: 

(i) 

(ii) 

the price of those financial instruments at the trading venues 
where  those  financial  instruments  were  first  admitted  to 
trading; 

the  price  of  those  financial  instruments  at  the  most  relevant 
market  in  terms  of  liquidity  where  that  price  is  widely 
published and is regarded by market participants as a reliable 
reference price; 

(iii) 

the consolidated tape for shares or ETFs.’; 

(ii) 

the following subparagraph is added: 

‘For the purposes of point (a), the continued use of that  waiver shall be 
subject to the conditions set out in Article 5.’; 

(b) 

in paragraph 2, the first subparagraph is replaced by the following: 

‘The reference price referred to in paragraph 1, point (a) shall be established by 
obtaining either of the following: 

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27 

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(a) 

the  midpoint  within  the  current  bid  and  offer  prices  of  any  of  the 
following: 

(i) 

the  trading  venue  where  those  financial  instruments  were  first 
admitted to trading; 

(ii) 

the most relevant market in terms of liquidity; 

(iii) 

the consolidated tape for shares or ETFs; 

(b)  when  the  price  referred  to  in  point  (a)  is  not  available,  the  opening  or 

closing price of the relevant trading session.’;  

(4) 

Article 5 is amended as follows: 

(a) 

the title is replaced by the following: 

‘Article 5 
Volume cap’; 

(b)  paragraph 1 is replaced by the following: 

‘1. 
Trading  venues  shall  suspend  their  use  of  the  waivers  referred  to 
in Article 4(1), point (a), and 4(1), point (b)(i) where the percentage of volume 
traded  in  the  Union  in  a  financial  instrument  carried  out  under  those  waivers 
exceeds 7% of the total volume traded in that financial instrument in the Union. 
Trading venues shall base their decision to suspend the use of those waivers on 
the  data  published  by  ESMA  in  accordance  with  paragraph  4,  and  shall  take 
such decision within two working days after this publication of those data and 
for a period of six months.’; 

(c) 

paragraph 2 and 3 are deleted; 

(d)  paragraph 4 is replaced by the following: 

ESMA  shall  publish  within  five  working  days  of  the  end  of  each 

‘4. 
calendar month all of the following data: 

(a) 

(b) 

the total volume of Union trading per financial instrument in the previous 
12 months; 

the percentage of trading in a financial instrument carried out across the 
Union  under  the  waivers  referred  to  in  Article 4(1),  point  (a),  and 
Article 4(1), point (b)(i); 

(c) 

the  methodology  that  is  used  to  derive  the  percentage  referred  to  in 
point (b).’;  

(e) 

(f) 

paragraph 5 is deleted; 

paragraph 7 is replaced by the following: 

‘7. 
To ensure a reliable basis for monitoring the trading taking place under 
the  waivers  referred  to  in  Article 4(1),  point  (a),  and  Article 4(1),  point  (b)(i) 
and  for  determining  whether  the  limits  referred  to  in  paragraph  1  have  been 
exceeded,  operators  of  trading  venues  shall  have  in  place  systems  and 
procedures to enable the identification of all trades which have taken place on 
their venue under those waivers.’; 

(5) 

Article 9 is amended as follows: 

(a) 

in paragraph 1, point (b) is deleted; 

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(b) 

in paragraph 5, point (d) is deleted; 

(6) 

Article 11 is amended as follows: 

(a) 

paragraph 1 is amended as follows: 

(i) 

the first subparagraph is replaced by the following: 

‘Based  on  the  deferral  regime  as  set  out  in  paragraph  4,  competent 
authorities  shall  authorise  market  operators  and  investment  firms 
operating  a  trading  venue  to  defer  the  publication  of  the  price  of 
transactions until the end of the trading day, or the volume of transactions 
for a maximum of two weeks.’; 

(ii) 

in the second subparagraph, point (c) is deleted; 

(b)  paragraph 3 is replaced by the following: 

‘3. 
Competent authorities may, when authorising a deferred publication as 
referred to in paragraph 1 with regard to transactions in sovereign debt, allow 
market operators and investment firms operating a trading venue:  

(a) 

(b) 

to  allow  the  omission  of  the  publication  of the  volume  of  an  individual 
transaction during an extended time period of deferral; or 

to  publish  in  an  aggregated  form  several  transactions  in  sovereign  debt 
for an indefinite period of time.’ 

(c) 

paragraph 4 is amended as follows: 

(i) 

the first subparagraph is amended as follows: 

point (c) is replaced by the following: 

the  transactions  eligible  for  price  or  volume  deferral,  and  the 
‘(c) 
transactions  for  which  competent  authorities  shall  authorise  market 
operators and investment firms operating a trading venue to provide for 
deferred  publication  of  the  volume  or  price  for  one  of  the  following 
durations: 

(i) 

15 minutes; 

(ii) 

end of trading day; 

(iii) 

two weeks.’; 

(ii) 

the following subparagraph is inserted after the first subparagraph: 

‘For the purposes of the first subparagraph, point (c), ESMA shall specify the 
buckets for which the deferral period shall apply across the Union by using the 
following criteria: 

(a) 

(b) 

(c) 

the liquidity determination; 

the size of the transaction, in particular transactions in illiquid markets or 
transactions that are large in scale; 

for  bonds,  the  classification  of  the  bond  as  investment  grade  or  high 
yield.’; 

(7) 

in Article 13, the following paragraph 3 is added: 

‘3.  ESMA shall develop draft regulatory technical standards to specify the content, 
format and terminology of the reasonable commercial basis information that trading 

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venues,  APAs,  CTPs  and  systematic  internalisers  have  to  make  available  to  the 
public. 

ESMA shall submit those draft regulatory technical standards to the Commission by 
[OP please insert nine months after entry into force]. 

Power  is  delegated  to  the  Commission  to  adopt  the  regulatory  technical  standards 
referred  to  in  the  first  subparagraph  in  accordance  with  Articles  10  to  14  of 
Regulation (EU) No 1095/2010.’; 

(8) 

Article 14 is amended as follows:  

(a) 

paragraphs 2 and 3 are replaced by the following: 

‘2. 
This  Article  and  Articles  15,  16  and  17  shall  apply  to  systematic 
internalisers  when  they  deal  in  sizes  up  to  twice  the  standard  market  size. 
Systematic internalisers shall not be subject to this Article and Articles 15, 16 
and 17 when they deal in sizes above twice the standard market size. 

Systematic  internalisers  are  allowed  to  quote  any  size.  The  minimum 
3. 
quoting size shall be at least the equivalent of twice the standard market size of 
a share, depositary receipt, ETF, certificate, or other financial instrument that is 
similar to those financial instruments and that is traded on a trading venue. For 
a  particular  share,  depository  receipt,  ETF,  certificate  or  other  financial 
instrument that is similar to those financial instruments and that is traded on a 
trading venue, each quote shall include a firm bid and offer price, or firm bid 
and  offer  prices  for  a  size  or  sizes  which  could  be  up  to  twice  the  standard 
market  size  for  the  class  of  shares,  depositary  receipts,  ETFs,  certificates  or 
financial  instruments  that  are  similar  to  those  financial  instruments,  to  which 
the financial instrument belongs. The price or prices shall reflect the prevailing 
market  conditions  for  that  share,  depositary  receipt,  ETF,  certificate  or 
financial instrument that is similar to those financial instruments.’; 

(b) 

the following paragraph 6a is inserted: 

Systematic internalisers shall not match orders at the mid-point within 

‘6a. 
the current bid and offer prices.’; 

(9) 

Article 17a is replaced by the following: 

‘Article 17a 
Tick sizes 

1. 

2. 

Systematic internalisers’ quotes, price improvements on those quotes and execution 
prices shall comply with the tick sizes set in accordance with Article 49 of Directive 
2014/65/EU. 

The  application  of  the  tick  sizes  set  in  accordance  with  Article  49  of  Directive 
2014/65/EU shall not prevent systematic internalisers from matching orders large in 
scale  at  mid‐point  within  the  current  bid  and  offer  prices.  Matching  orders  at  mid-
point within the current bid and offer prices below large in scale but above twice the 
standard market size shall be allowed in so far as those tick sizes are complied with.’; 

(10) 

the following Articles 22a, 22b and 22c are inserted: 

‘Article 22a 
Provision of market data to the CTP 

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30 

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1. 

2. 

3. 

4. 

5. 

1. 

2. 

Market data contributors shall, with regard to shares, ETFs and bonds that are traded 
on a trading venue, and with regard to OTC derivatives as defined in Article 2(7) of 
Regulation (EU) No 648/2012 that are subject to the clearing obligation as referred to 
in Article 4 of that Regulation, provide the CTP with all the market data as set out in 
Article 22b(2) as needed for the CTP to  be operational. Those market  data shall be 
provided in a harmonised format, through a high quality transmission protocol, and 
as close to real-time as is technically possible. 

Each  CTP  shall  be  free  to  choose,  from  among  the  types  of  connection  that  the 
market  data contributors offer to  other users, which connection it wishes to  use for 
the  provision  of  those  data.  Market  data  contributors  shall  not  receive  any 
remuneration  for  providing  the  connectivity  other  than  the  revenue  sharing  for 
shares,  as  specified  in  the  conditions  for  appointment  of  the  CTP  in  the  selection 
process laid down in 27da. 

Market data contributors shall, with regard to transactions in the instruments referred 
to  in  paragraph 1  that  are  concluded  by  investment  firms  outside  a  trading  venue, 
provide the CTP with the market data concerning those transactions either directly or 
through an APA. 

Market  data  contributors  shall  not  receive  any  remuneration  for  the  market  data 
provided other than the revenue sharing as referred to in Article 27da(2), point (c). 

Market  data  contributors  shall  provide  the  information  with  regard  to  waivers  and 
deferrals as laid down in Articles 4, 7, 11, 14, 20 and 21. 

Article 22b 
Market data quality 

The Commission shall set up an expert stakeholder group by [OP add 3 months as of 
entry into force] to provide advice on the quality and the substance of market data, 
the  common  interpretation  of  market  data  and  the  quality  of  the  transmission 
protocol  referred  to  in  Article 22a(1).  The  expert  stakeholder  group  shall  provide 
advice on a yearly basis. That advice shall be made public.  

The  Commission  shall  be  empowered  to  adopt  delegated  acts  in  accordance  with 
Article 50 to specify the quality and the substance of the market data and the quality 
of the transmission protocol. 

Those delegated acts shall in particular specify all of the following: 

(a) 

the  market  data,  contributors  need  to  provide  to  the  CTP  in  order  to  produce 
the  core  market  data  needed  for  the  CTP  to  be  operational,  including  the 
substance and the format of those market data; 

(b)  what  constitutes  core  market  data  referred  to  in  Article  2(1)(36b)  and  the 

regulatory data referred to in Article 2(1)(36c). 

For  the  purposes  of  the  first  subparagraph,  the  Commission  shall  take  into  account 
the  advice  from  ESMA  and  from  the  technical  expert  group  established  in 
accordance  with  paragraph  2,  international  developments,  and  standards  agreed  at 
Union  or  international  level.  The  Commission  shall  ensure  that  the  delegated  acts 
adopted  take  into  account  the  reporting  requirements  laid  down  in  Articles  3,  6,  8, 
10, 14, 18, 20, 21 and 27g. 

Article 22c 
Synchronisation of business clocks 

EN 

31 

  EN 

1. 

2. 

Trading  venues  and  their  members  or  participants,  systematic  internalisers,  APAs 
and CTPs shall synchronise their business clocks to record the date and time of any 
reportable event. 

ESMA  shall,  in  accordance  with  international  standards,  develop  draft  regulatory 
technical  standards  to  specify  the  level  of  accuracy  to  which  clocks  are  to  be 
synchronised. 

(11) 

ESMA shall submit those draft regulatory technical standards to the Commission by 
[OP insert a date 6 months as of entry into force]. 

Power  is  delegated  to  the  Commission  to  adopt  the  regulatory  technical  standards 
referred  to  in  the  first  subparagraph  in  accordance  with  Articles  10  to  14  of 
Regulation (EU) No 1095/2010.’; 

in Article 23, paragraph 1 is replaced by the following: 
‘1.  An investment firm shall ensure that the trades it undertakes in shares with an 
EEA  International  Securities  Identification Number  (ISIN)  shall  take  place  on  a 
regulated  market,  MTF,  systematic  internaliser  or  a  third-country  trading  venue 
assessed  as  equivalent  in  accordance  with  Article  25(4),  point (a)  of  Directive 
2014/65/EU, as appropriate, unless : 

(a) 

(b) 

those shares are traded on a third-country venue in the local currency;; or 

those 
trades  are  carried  out  between  eligible  counterparties,  between 
professional counterparties or between eligible and professional counterparties 
and do not contribute to the price discovery process. 

ESMA  shall  publish  a  list  on  its  website  containing  the  shares  with  an  EEA  ISIN 
subject to the share trading obligation and shall update that list regularly.’; 

(12) 

Article 26(9) is amended as follows: 

(a) 

the following point (j) is added: 

‘(j) 

the date by which transactions are to be reported.’; 

(b) 

the following subparagraph is inserted after the first subparagraph: 

‘When  drafting  those  regulatory  technical  standards,  ESMA  shall  take  into 
account  international  developments  and  standards  agreed  upon  at  Union  or 
global level, and their consistency with the reporting requirements laid down in 
Regulation (EU) 2019/834 and Regulation (EU) 2015/2365.’; 

(13) 

in Article 26, the following paragraph 11 is added: 

‘11.  By [OP  insert  date 2 years as of  date of  publication], ESMA shall submit to 
the Commission a report assessing the feasibility of more integration in  transaction 
reporting and streamlining of data flows under Article 26 of this Regulation to: 

(a) 

(b) 

reduce duplicative  or inconsistent requirements  for transaction data reporting, 
and  in  particular  duplicative  or  inconsistent  requirements  laid  down  in  this 
Regulation and Regulation (EU) 2019/834 of the European Parliament and of 
the Council*1 and Regulation (EU) 2015/2365; 

improve  data  standardisation  and  efficient  sharing  and  use  of  data  reported 
within  any  Union  reporting  framework  by  any  relevant  competent  authority, 
both Union and national. 

EN 

32 

  EN 

When  preparing  the  report,  ESMA  shall,  where  relevant,  work  in  close 
cooperation  with  the  other  bodies  of  the  European  System  of  Financial 
Supervision and the European Central Bank. 

________________________________________________________ 
*1 
Regulation  (EU)  2019/834  of  the  European  Parliament  and  of  the  Council  of 
20  May  2019  amending  Regulation  (EU)  No  648/2012  as  regards  the  clearing 
obligation, the suspension of the clearing obligation, the reporting requirements, the 
risk-mitigation  techniques  for  OTC  derivative  contracts  not  cleared  by  a  central 
counterparty,  the  registration  and  supervision  of  trade  repositories  and  the 
requirements for trade repositories (OJ L 141, 28.5.2019, p. 42)’; 

(14) 

Article 27(3) is amended as follows: 

(a) 

the following point (c) is added: 

‘(c) 

the date by which reference data are to be reported’. 

(b) 

the following subparagraph is inserted after the first subparagraph: 

‘When  drafting  those  draft  regulatory  technical  standards,  ESMA  shall  take 
into account international developments and standards agreed upon at Union or 
global level,  and the consistency  of those draft  regulatory technical standards 
with  the  reporting  requirements  laid  down  in  Regulation  (EU)  2019/834  and 
Regulation (EU) 2015/2365.’; 

(15) 

the following Article 27da is inserted: 

‘Article 27da 
Selection process for the authorisation of a single consolidated tape provider for each 
asset class 

1. 

2. 

By [OP insert date 3 months as of entry into force], ESMA shall organise a selection 
procedure for the appointment of the CTP for a five year term. ESMA shall organise 
a  separate  selection  procedure  for  each  of  the  following  asset  classes:  shares, 
exchange traded funds, bonds and derivatives (or relevant subclasses of derivatives). 

For  each  of  the  asset  classes  referred  to  in  paragraph  1,  ESMA  shall  assess  the 
applications on the basis of the following criteria: 

(a) 

(b) 

the  technical  ability  of  the  applicants  to  provide  a  resilient  consolidated  tape 
throughout the Union; 

the  capacity  of  the  applicants  to  comply  with  the  organisational  requirements 
laid down in Article 27h; 

(c) 

the governance structure of the applicants; 

(d) 

the speed at which the applicants can disseminate core market data; 

(e) 

(f) 

(g) 

(h) 

the capacity of the applicants to disseminate good quality data; 

the total expenditure needed by the applicants to develop the consolidated tape 
and the costs of operating the consolidated tape on an ongoing basis; 

the level of the fees that the applicant intends to charge to the different types of 
users of the core market data; 

the  possibility  of  the  applicants  to  use  modern  interface  technologies  for  the 
provision of the core market data and for connectivity; 

EN 

33 

  EN 

3. 

4. 

5. 

6. 

7. 

(i) 

(j) 

the storage medium the applicants will use for the storage of historic data; 

the protocols the applicants will use to prevent and address outages. 

The  first  selection  procedure  organised  for  shares  shall  only  invite  bids  for  the 
provision  of  a  consolidated  tape  containing  post  trade  data.  Prior  to  subsequent 
selection  procedures,  ESMA  shall  assess  market  demand  and  revenue  impacts  on 
regulated  markets  and  based  on  that  assessment,  report  to  the  Commission  on  the 
opportunity  of  adding  best  bids  and  offers  and  corresponding  volumes  to  the  tape. 
Based  on  that  report  and  on  the  experience  gained  further  to  the  first  selection 
procedure,  the  Commission  is  empowered  to  adopt  a  delegated  act  specifying  the 
appropriate level of pre-trade data to be contributed to the CTP.  

The selection of the CTP for shares shall, in addition to the criteria in paragraph 2, 
consider the revenue participation scheme, and in particular the formula, applicable 
to  regulated  markets  that  are  market  data  contributors.  ESMA  shall,  when 
considering the competing tenders, select the CTP for shares that offers the revenue 
participation scheme that provides regulated markets, in particular smaller regulated 
markets,  with  the  highest  amount  of  revenue  that  remains  for  distribution  once 
deducted operating costs and a reasonable margin. This revenue shall be distributed 
in accordance with Article 27h(1)(c), and in a manner commensurate to the market 
data contributed according to Article 22a.  

ESMA  shall  adopt  a  fully  reasoned  decision  selecting  and  authorising  the  entities 
operating  the  consolidated  tapes  within  3  months  as  of  initiation  of  the  selection 
procedure  referred  to  in  paragraph  2.  Such  reasoned  decision  shall  specify  the 
conditions  under  which  the  CTPs  shall  operate,  and  in  particular  the  level  of  fees 
referred  to  in  paragraph  2,  point  (g)  and  for  shares  the  level  of  the  participation 
referred to in paragraph 3, in particular for smaller regulated markets.  

The selected CTPs shall comply at all times with the organisational requirements set 
out  in  Article  27h  and  with  the  conditions  set  out  in  the  decision  of  ESMA 
authorising  the  CTP  referred  to  in  paragraph  3.  A  CTP  that  is  no  longer  able  to 
comply  with  those  requirements  and  conditions,  including  the  requirements  and 
conditions on system disruptions and intrusions, shall inform ESMA thereof without 
undue delay. 

The withdrawal of the authorisation referred to in Article 27e shall only take effect as 
of the moment that a new CTP has been selected and authorised in accordance with 
paragraphs 1 to 4.  

(16) 

Article 27h is replaced by the following: 

‘Article 27h 

Organisational requirements for consolidated tape providers 

1. 

CTPs shall, in accordance with the conditions for authorisation referred to in Article 
27da: 

(a) 

collect  all  market  data  provided  through  contributions  in  relation  to  the  asset 
class for which they are authorised; 

(b) 

collect monthly subscription fees from users; 

(c) 

in the case of market data concerning shares, redistribute part of their revenues 
for the purposes of covering the cost related to mandatory contribution and of 
ensuring  a  fair  level  of  participation  for  regulated  markets,  and  in  particular 

EN 

34 

  EN 

smaller regulated markets, in the revenue generated by the consolidated tape, in 
accordance with Article 27da(4); 

(d)  make  consolidated  core  market  data,  for  the  provision  of  which  the  CTP  is 
selected in accordance with Article 27da, available in accordance with the data 
quality requirements set out in Article 22b to users into a continuous electronic 
data  stream  on  non-discriminatory  terms  as  close  to  real  time  as  technically 
possible; 

(e) 

(f) 

ensure that the publication of the core market data complies with the applicable 
waivers and deferrals in Articles 4, 7, 11, 14, 20 and 21;  

ensure  that  the  consolidated  core  market  data  is  easily  accessible,  machine 
readable and utilisable for all users, including retail investors. 

For the purpose of establishing the participation in point (c), the revenue of the CTP 
shall be allocated among regulated markets  according to  a  formula that  reflects  the 
proportion  of  pre-trade  transparent  liquidity  in  shares  displayed  by  a  regulated 
market relative to the average daily turnover in these shares in the Union. 

2. 

CTPs shall adopt and publish on their website service level standards covering all of 
the following: 

(a) 

an inventory of market data contributors from whom market data are received; 

(b)  modes and speed of delivery of consolidated market data to users; 

(c)  measures 

taken 
consolidated market data. 

to  ensure  operational  continuity 

in 

the  provision  of 

3. 

4. 

CTPs  shall  have  sound  security  mechanisms  in  place  designed  to  guarantee  the 
security of the means of transfer of market data between the market data contributors 
and  the  CTP  and  between  the  CTP  and  the  users  and  to  minimise  the  risk  of  data 
corruption  and  unauthorised  access.  CTPs  shall  maintain  adequate  resources  and 
have back-up facilities in place to offer and maintain its services at all times. 

After  12  months  of  full  operation  of  the  CTP  for  shares,  ESMA  shall  provide  the 
Commission with a motivated opinion on the effectiveness and fairness of the level 
of participation of regulated markets in the revenues generated by the CTP as set out 
in  accordance  with  the  second  subparagraph  of  paragraph  1.  The  Commission  may 
request  ESMA  to  provide  further  opinions,  where  necessary  or  appropriate.  The 
Commission shall be empowered to adopt a delegated act in accordance with Article 
50 to revise the allocation key for the revenue redistribution, where appropriate.’; 

(17) 

the following Article 27ha is inserted: 

‘Article 27ha 
Reporting obligations for consolidated tape providers 

1. 

2. 

CTPs  shall,  at  the  end  of  each  quarter,  publish  on  their  website,  which  shall  be 
accessible for free, performance statistics and incident reports relating to data quality 
and systems. 

2.  ESMA  shall  develop  draft  regulatory  technical  standards  to  specify  the  content, 
timing, format and terminology of the reporting obligation. 

ESMA shall submit those draft regulatory technical standards to the Commission by 
[OP please insert nine months after entry into force]. 

EN 

35 

  EN 

Power  is  delegated  to  the  Commission  to  adopt  the  regulatory  technical  standards 
referred  to  in  the  first  subparagraph  in  accordance  with  Articles  10  to  14  of 
Regulation (EU) No 1095/2010.’; 

3. 

CTPs shall keep and preserve records relating to their business for a period of no less 
than five years. Information concerning the first two years shall be kept in an easily 
accessible place, and the CTP shall promptly provide ESMA with such records upon 
request.’; 

(18) 

in Article 28(1), paragraph 1, the introductory wording is replaced by the following: 

‘1. 
Financial  counterparties  that  meet  the  conditions  set  out  in  Article  4a(1), 
second  subparagraph,  of  Regulation  (EU)  No  648/2012,  and  non-financial 
counterparties that meet the conditions set out in Article 10(1), second subparagraph, 
of  that  Regulation,  shall  conclude  transactions,  which  are  neither  intragroup 
transactions as defined in Article 3 of that Regulation nor transactions covered by the 
transitional  provisions  laid  down  in  Article  89  of  that  Regulation,  with  other  such 
financial  counterparties  or  other  such  non-financial  counterparties  in  derivatives 
pertaining  to  a  class  of  derivatives  that  has  been  declared  subject  to  the  trading 
obligation in accordance with the procedure set out in Article 32 of this Regulation 
and listed in the register referred to in Article 34 of this Regulation only on:’; 

(19) 

in Article 32, the following paragraphs 7, 8 and 9 are added: 

‘7.  Where  ESMA  considers  that  the  suspension  of  the  clearing  obligation  as 
referred to in Article 6a of Regulation (EU) No 648/2012 is a material change in the 
criteria for the trading obligation to take effect, as referred to in paragraph 5 of this 
Article,  ESMA  may  request  the  Commission  to  suspend  the  trading  obligation  laid 
down  in  Article  28(1)  and  (2)  of  this  Regulation  for  the  same  classes  of  OTC 
derivatives that are subject to the request to suspend the clearing obligation. 

8. 

The request referred to in paragraph 7 shall not be made public. 

9. 
After having received the request referred to in  paragraph 7, the Commission 
shall, without undue delay and, on the basis of the reasons and evidence provided by 
ESMA, do either of the following: 

(a) 

in an implementing act  suspend the trading obligation for the classes of OTC 
derivatives that are subject to the request to suspend the clearing obligation; 

(b) 

reject the requested suspension. 

For  the  purposes  of  point  (b),  the  Commission  shall  inform  ESMA  of  the  reasons 
why it rejected the requested suspension. The Commission shall immediately inform 
the  European  Parliament  and  the  Council  of  that  rejection  and  forward  them  the 
reasons  provided  to  ESMA.  The  information  provided  to  the  European  Parliament 
and the Council regarding the rejection and the reasons for that rejection shall not be 
made public.’; 

(20) 

the following Article 32a is inserted: 

‘Article 32a 
Stand-alone suspension of the trading obligation 

1. 

At the request of the competent authority of a Member State, the Commission may 
suspend the derivatives trading obligation with respect to certain investment firms in 
accordance  with  the  procedure  referred  to  in  Article  51  and  after  having  consulted 
ESMA.  The  competent  authority  shall  indicate  why  it  considers  that  the  conditions 

EN 

36 

  EN 

for a suspension are met. In particular, the competent authority shall demonstrate that 
an investment firm within its jurisdiction:  

(a) 

(b) 

(c) 

regularly  receives  requests  for  a  quote  for  the  derivatives  subject  to  the 
derivatives trading obligation; 

from a non-EEA counterpart which has no active membership on a EU trading 
venue that offers trading in the derivative subject to the trading obligation; and 

regularly  acts  as  a  market  maker  in  the  derivative  subject  to  the  derivatives 
trading obligation. 

When  assessing  whether  to  suspend  the  trading  obligation  in  accordance  with 
paragraph 1, the Commission shall take into account whether such suspension of the 
trading obligation would have a distortive effect on the clearing obligation laid down 
in Article 4(1) of Regulation (EU) No 648/2012. 

The  implementing  act  referred  to  in  paragraph  1  shall  be  accompanied  by  the 
evidence presented by the competent authority requesting the suspension. 

The  implementing  act  referred  to  in  paragraph  1  shall  be  communicated  to  ESMA 
and  shall  be  published  in  the  ESMA  register  referred  to  in  Article  34  of  this 
Regulation. 

The  Commission  shall  regularly  review  whether  the  grounds  for  the  suspension  of 
the trading obligation continue to apply.’; 

2. 

3. 

4. 

5. 

(21) 

Article 35 is amended as follows: 

(a) 

in paragraph 1, first subparagraph, the introductory wording is replaced by the 
following: 

‘1.  Without prejudice to Article 7 of Regulation (EU) No 648/2012, a CCP 
shall  accept  to  clear  financial  instruments  on  a  non-discriminatory  and 
transparent basis, including as regards collateral requirements and fees relating 
to access, regardless of the trading venue on which a transaction is executed. 

The  requirement  in  the  first  subparagraph  shall  not  apply  to  exchange-traded 
derivatives. 

The  CCP  shall  in  particular  ensure  that  a  trading  venue  has  the  right  to  non-
discriminatory treatment of contracts traded on that trading venue in terms of:’; 

(b)  paragraph 3 is replaced by the following: 

The  CCP  shall  provide  a  written  response  to  the  trading  venue  either 
‘3. 
within  three  months  of  permitting  access,  on  condition  that  a  relevant 
competent authority has granted access pursuant to paragraph 4, or within three 
months of denying access. The CCP may deny a request for access only under 
the conditions specified in paragraph 6(a). Where a CCP denies access, it shall 
provide  full  reasons  in  its  response  and  inform  its  competent  authority  in 
writing  of  the  decision.  Where  the  trading  venue  is  established  in  a  Member 
State  other  than  the  one  of  the  CCP,  the  CCP  shall  also  provide  such 
notification and reasoning to the competent authority of that trading venue. The 
CCP shall provide access within three months of providing a positive response 
to the access request.’; 

(22) 

Article 36 is amended as follows: 

(a) 

in paragraph 1, the first subparagraph is replaced by the following: 

EN 

37 

  EN 

‘Without  prejudice  to  Article  8  of  Regulation  (EU)  No  648/2012,  a  trading 
venue  shall,  upon  request,  provide  trade  feeds  on  a  non-discriminatory  and 
transparent  basis,  including  as  regards  fees  related  to  access,  to  any  CCP 
authorised or recognised by that Regulation that wishes to clear transactions in 
financial  instruments  that  are  concluded  on  that  trading  venue.  That 
requirement shall not apply to:  

(a) 

any  derivative  contract  that  is  already  subject  to  the  access  obligations 
under Article 8 of Regulation (EU) No 648/2012; 

(b) 

exchange-traded derivatives.’; 

(b)  paragraph 3 is replaced by the following: 

The trading venue shall  provide a written response to  the CCP within 
‘3. 
three  months  either  permitting  access,  under  the  condition  that  the  relevant 
competent  authority  has  granted  access  pursuant  to  paragraph  4,  or  denying 
access. The trading venue may deny access only under the conditions specified 
pursuant  to  paragraph  6,  point (a).  When  access  is  denied,  the  trading  venue 
shall  provide  full  reasons  in  its  written  response  and  forward  that  written 
response to its competent authority. Where the CCP is established in a different 
Member State than the trading venue, the trading venue shall also forward that 
written  response  to  the  competent  authority  of  the  CCP.  The  trading  venue 
shall provide access within three months of providing a positive response to the 
access request.’; 

(c) 

paragraph 5 is deleted; 

(23) 

in Article 38, paragraph 1 is replaced by the following: 

‘1.  A  trading  venue  established  in  a  third  country  may  request  access  to  a  CCP 
established  in  the  Union  only  if  the  Commission  has  adopted  a  decision  in 
accordance with Article 28(4) relating to that third country. 

A  CCP  established  in  a  third  country  may  request  access  to  a  trading  venue  in  the 
Union subject to that CCP being recognised under Article 25 of Regulation (EU) No 
648/2012. 

CCPs  and  trading  venues  established  in  third  countries  shall  only  be  permitted  to 
make  use  of  the  access  rights  referred  to  in  Articles  35  and  36  with  regard  to 
financial  instruments  covered  by  those  Articles  and  provided  that  the  Commission 
has  adopted  a  decision  in  accordance  with  paragraph  3  of  this  Article,  determining 
that the legal and supervisory framework of the third country is considered to provide 
for an effective equivalent system for permitting CCPs and trading venues authorised 
under  foreign  regimes  access  to  CCPs  and  trading  venues  established  in  that  third 
country.’; 

(24) 

in Article 38g(1), the introductory wording is replaced by the following: 

‘Where  ESMA  finds  that  a  person  listed  in  Article  38b(1),  point  (a),  has  not 
complied with any of the requirements laid down in Article 22a, Article 22b, or Title 
IVa, it shall take one or more of the following actions:’; 

(25) 

in Article 38h(1), the first subparagraph is replaced by the following: 

‘Where  ESMA,  in  accordance  with  Article 38k(5),  finds  that  a  person  listed  in 
Article  38b(1),  point  (a),  has  intentionally  or  negligently  not  complied  with  any  of 

EN 

38 

  EN 

the  requirements  provided  for  in  Article  22a,  Article  22b,  or  in  Title  IVa,  it  shall 
adopt a decision imposing a fine in accordance with paragraph 2 of this Article.’; 

(26) 

the following Article 39a is inserted: 

‘Article 39a 
Ban on payment for forwarding client orders for execution 

Investment firms acting on behalf of clients shall not receive any fee or commission 
or  non-monetary  benefits  from  any  third  party  for  forwarding  client  orders  to  such 
third party for their execution.’; 

(27) 

Article 50 is amended as follows:  

(a) 

paragraph 2 is replaced by the following: 

‘2. 
The  power  to  adopt  delegated  acts  as  referred  to  in  the  following 
provisions  shall  be  conferred  for  an  indeterminate  period  from  2  July  2014: 
Article 1(9), Article 2(2) and (3), 13(2), 15(5), 17(3), Article 19(2) and (3), and 
Articles 22b(2), 27(4), 27da(3), 27g(7), 27h(4), 31(4), 38k(10), 38n(3), 40(8), 
41(8), 42(7), 45(10) and 52(10).’; 

(b) 

in paragraph 3, the first sentence is replaced by the following: 

‘The  delegation  of  power  referred  to  in  the  following  provisions  may  be 
revoked  at  any  time  by  the  European  Parliament  or  by  the  Council:  Article 
1(9),  Article 2(2)  and  (3),  Articles  13(2),  15(5),  17(3),  Article  19(2)  and  (3), 
and  Articles  22b(2),  27(4),  27da(3),  27g(7),  27h(4),  31(4),  38k(10),  38n(3), 
40(8), 41(8), 42(7), 45(10) and 52(10).”; 

(c) 

in paragraph 5, the first sentence is replaced by the following: 

‘A delegated act adopted pursuant to Article 1(9), Article 2(2) and (3), Articles 
13(2), 15(5), 17(3), Article 19(2) and (3), and Articles 22b(2), 27(4), 27da(3), 
27g(7), 27h(4), 31(4), 38k(10), 38n(3), 40(8), 41(8), 42(7), 45(10) and 52(10) 
shall  enter  into  force  only  if  no  objection  has  been  expressed  either  by  the 
European  Parliament  or  by  the  Council  within  a  period  of  three  months  of 
notification  of  that  act  to  the  European  Parliament  and  to  the  Council  or  if, 
before the expiry of that period, the European Parliament and the Council have 
both informed the Commission that they will not object.”; 

(28) 

Article 52 is amended as follows: 

(a) 

paragraphs 11 and 12 are replaced by the following: 

Three  years  after  the  first  authorisation  of  a  consolidated  tape,  the 
‘11. 
Commission  shall,  after  having  consulted  ESMA,  submit  a  report  to  the 
European Parliament and to the Council on the following:  

(a) 

the asset classes covered by a consolidated tape; 

(b) 

the timeliness and delivery quality of market data consolidation; 

(c) 

the  role  of  market  data  consolidation  in  reducing  implementation 
shortfall; 

(d) 

the number of subscribers to consolidated market data per asset class; 

(e) 

the  effect  of  market  data  consolidation  on  remedying  information 
asymmetries between various capital market participants; 

EN 

39 

  EN 

(f) 

(g) 

(h) 

the  appropriateness  and  functioning  of  the  participation  scheme  for 
market data contributions; 

the effects of the consolidated market data on investments in SMEs. 

the  possibility  that  the  tape  facilitates  the  identification  of  financial 
instruments  which  display  features  aligned  with  Regulation  [PO  please 
insert reference to the Regulation on European green bonds] 

12. 
If by [OP insert date 1 year as of entry into force], no consolidated tape 
has emerged through the selection procedure organised by ESMA as referred to 
in  Article  27da,  the  Commission  shall  review  the  framework  and  may 
accompany that review, where appropriate and after having consulted ESMA, 
with  a  legislative  proposal  setting  out  how  ESMA  should  provide  a 
consolidated tape.’; 

(b)  paragraph 14 is deleted; 

(29) 

in Article 54, paragraph 2 is deleted. 

Article 2 
Entry into force and application 

This  Regulation  shall  enter  into  force  and  apply  on  the  twentieth  day  following  that  of  its 
publication in the Official Journal of the European Union. 

This Regulation shall be binding in its entirety and directly applicable in all Member States. 

Done at Brussels, 

For the European Parliament 
The President 

For the Council 
The President 

EN 

40 

  EN