The European Securities and Markets Authority (ESMA) has issued the latest iteration consultation papers, part of a comprehensive effort to support drafts for its regulatory technical standards (RTS), with regards to the creation of a consolidated tape for non-equity instruments, per an ESMA report.
The propensity of RTS drafts for the purpose of non-tape equity instruments are necessitated under the Markets in Financial Instruments Directive (MiFID II). MiFID II legislation and framework is slated for a 2017 passage, having already drawn a number of preparatory actions and directives from compliance groups and also from venues across the industry.
Market Trading Ideas for May 10-14Go to article >>
As part of a sweeping scope of focus, MiFID II covers equity-like and non-equity instruments traded on several venues, which will essentially see the implementation of provisions for establishing a central source of post-trade prices or consolidated tape, among many other new developments.
This is not the first draft submitted by ESMA, as its already released multiple RTS reports on an equity tape – however the group is seeking feedback on its draft RTS for the non-equity tape. In order to create the non-equity tape, trading venues and approved publication arrangements (APAs) will need to send real-time post-trade data to consolidated tape providers (CTPs), who then consolidate the data tranche in real-time and make the data available to the public.
Presently, the key areas of the ESMA’s draft RTS on the non-equity tape include rules that would allow CTPs to specialize in only one or a group of asset classes. According to Steven Maijoor, ESMA Chair, in a recent statement on the draft, “Reliable trading data helps investors find the right price in the marketplace, ensuring they get the best value for money. The consolidated data tape for non-equity products for the EU will enable investors to make more informed choices.”
“Having consolidated data available across multiple venues and borders also ensures the protection of investors regardless their location,” he added.