Changes from report parliamentary committee draft to plenary report

Added‘Article 22a Provision of market data to the CTP

RemovedRegulation (EU) No 600/2014

Added1. 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 the regulatory technical standarts referred to 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.

RemovedArticle 1 – paragraph 25, Article 38h – paragraph 1 – subparagraph 1: 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 the requirements provided for in Article 22, 22a, 22b or 26, or in Title IVa, it shall adopt a decision imposing a fine in accordance with paragraph 2 of this Article.

Added1a. Regulated markets and SME growth markets whose average daily trading volume of shares represents less than 1 % of the average daily trading volume of the Union, and who do not form part of a market operator group that operates regulated markets that collectively represent more than 2% of the average daily trading volume in the Union, shall not be required to provide their market data to the CTP.

RemovedSame as previous amendment.

Added1b. Regulated markets and SME growth markets whose average daily trading volume of shares exceeds 1 % of the average trading volume of the Union, and who do not form part of a market operator group that operates regulated markets that collectively represent more than 2% of the average daily trading volume in the Union, shall not be required to provide their market data to the CTP if:

RemovedRegulation (EU) No 600/2014

Added(i) the regulated market or SME growth market accounts for more than 80% of the average daily trading volume of shares that were first admitted to trading on that regulated market or SME growth market; or

RemovedArticle 1 – paragraph 26, Article 39a – title: Rules on execution and forwarding of retail client orders

Added(ii) the average daily trading volume of shares first admitted on a regulated market on MTFs and systematic internalisers collectively is 20% or less of the average daily trading volume of those shares.

RemovedRegulation (EU) No 600/2014

AddedESMA shall publish on its website a list of regulated markets exempted from providing their pre-trade market data to the CTP and shall update that list regularly.

RemovedArticle 1 – paragraph 26, Article 39a – paragraph 1: -1. Investment firms executing orders on behalf of a retail client shall take all necessary steps to obtain the best possible price for their clients, net of costs relating to execution, which shall include all expenses directly related to the execution of the order, including execution venue fees, clearing and settlement fees and any other fees paid to third parties involved in the execution of the order. / 1. 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 any third party for their execution. / 1a. The Commission shall adopt a delegated act in accordance with Article 50 by ... [12 months after the date of entry into force of this amending Regulation] to specify the market practices falling under the provision of the first subparagraph of this Article. The Commission shall regularly update that delegated act to account for the development of new market practices.

Added1c. Notwithstanding paragraphs 1a and 1b, smaller regulated markets and SME growth markets may decide to provide their market data to the CTP, in accordance with paragraph 1, by notifying ESMA and the CTP. Those regulated markets that decide to subject themselves to the requirement to provide market data in accordance with paragraph 1 shall start providing market data to the CTP within 30 working days of the date of the notification to ESMA.

RemovedThe discussions around PFOF stem out of largely divergent interpretation of best execution rues, at the expense of end-investors, particularly retail ones, and a level playing field across companies in the EU. Moving the best-execution requirements for retail clients to MiFIR and formulating them clearly, i.e. price minus costs, together with a ban on PFOF, would strengthen investor protection, redirect retail trading to lit venues and align the Union with other major jurisdictions which ban or are considering to ban PFOF.

Added2. Each CTP shall be free to choose, from among the types of connection and protocols that the market data contributors offer to other users, which connection and protocol 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.

RemovedRegulation (EU) No 600/2014

Added3. 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 through an APA. Market data providers shall, with regard to the best bids and offers in shares and ETFs provided by investment firms outside a trading venue, provide the CTP with the market data concerning those bids and offers either directly or through an APA.

RemovedArticle 1 – paragraph 28 – point a, Article 52 – paragraph 12: deleted

Added4. Market data contributors shall not receive any remuneration for the market data provided other than the revenue sharing as referred to in Article 27h(1), point (c).

RemovedRemoval of the fall-back clause for ESMA. Should no CTP emerge, the COM should assess the reasons for the failure and address them in subsequent legislation.A different option could be for ESMA to become the CTP for a less-ambitious CT (for example, a 15 minutes post-trade tape for shares. In that case, however, consolidated data should be provided to market participants for free given their very limited value).

Added5. Each CTP shall apply the deferrals as laid down in Articles▌ 7, 11, ▌ 20 and 21 to the market data to be submitted to the CTP, and disseminate them in accordance with Articles 6, 10, 20 and 21.

RemovedRegulation (EU) No 600/2014

Added5a. Competent authorities shall monitor the data quality provided to the CTP by market data contributors. Where data quality is deemed insufficient, competent authorities shall take the necessary measures, including sanctions as provided by Article 70 of Directive 2014/65/EU and Title VIa, Chapter 2 of this Regulation.

RemovedArticle 1 – paragraph 28 – point b, Article 52 – paragraphs 13 and 14: (b) paragraphs 13 and 14 are deleted;

Added1. The Commission shall set up an expert stakeholder group by [three months after the entry into force of this amending Regulation] to provide advice on the quality and the substance of core market data , in relation to the output of the consolidated tapes and the quality of the transmission protocol referred to in Article 22a(1). ESMA shall work closely with the expert stakeholder group, which shall provide advice on a yearly basis through a dedicated report. That report shall be made public.