The provisions in MiFID II on trade reporting are designed to resolve known issues with data quality and availability - 'Level 2' implementing measures give more detail on how these provisions will work
MiFID II believes there should be a consolidated tape of trade reports for shares, depositary receipts, Exchange Traded Funds (ETFs), certificates and other similar financial instruments from 3 January 2017, when the revised legislation takes effect.
Two years later it is envisaged that there will be a consolidated tape for non-equity instruments. The consolidated tape will be available free of charge 15 minutes after publication.
Consolidated tape providers (CTPs)
The consolidated tape will be produced by firms who are looking to be authorised as consolidated tape providers. They will have to meet certain organisational requirements and make the consolidated tape available on reasonable commercial terms.
The model of having multiple CTPs will be reviewed after the legislation takes effect, with a view to a single provider being appointed if the model of having multiple CTPs is not judged to have been a success.
Approved publication arrangements (APAs)
MiFID allowed trade reports to be published through trading venues, a third party or proprietary arrangements. We established a Trade Data Monitors (TDM) regime to ensure that third parties publishing data had adequate arrangements in place to ensure the quality of the data.
MiFID II has a similar regime which requires third parties publishing data to meet certain organisational requirements and be authorised as APAs.
Firms who are currently offering consolidated data services will need to decide whether or not to become authorised under the CTP regime.
TDMs will need to decide whether they wish to become APAs and investment firms will need to decide of those firms who become APAs which they want to use to publish their transactions.