Market data is of great importance to various market participants. This is essential for creating and managing portfolios, selecting financial products in terms of investment advisory services, receiving and sending orders on behalf of third parties. It also helps ensure compliance with regulatory requirements for risk management or best execution.
As part of its 2022 supervisory priorities, and in line with those set out by the European Securities and Markets Authority (ESMA) for the European Union, the AMF will conduct a series of assessments on the practices of four companies in the first half of 2022: An inspection was conducted. Provide market data and operate one or more trading venues. The main objective was to assess the compliance of the four companies with the regulatory requirements set out in MiFIR for the period from 1 January 2019 to 30 June 2022 and to assess the compliance of these companies with the implementation of the guidance published by ESMA. was to verify the steps taken.
During the investigation, AMF paid particular attention to the following points:
Accessibility, clarity and transparency of our market data policy, provision of market data on a reasonable commercial basis, and free provision of comprehensive market data 15 minutes after publication.
The AMF identified several shortcomings and potential regulatory violations in these areas, compounded by the fact that for two companies on the panel, the outsourcing agreements used were not documented. did.
There were shortcomings regarding accessibility, clarity, and transparency of pricing policies. For example, some companies did not disclose fees associated with the use of some of their market data in a format that was easily accessible to the public. These uses include displaying the data, using the data for purposes other than displaying the data, integrating the data into applications, or redistributing the data. AMF also notes that none of the companies adhere to the principle of disaggregating market data, which forces customers to obtain more data than necessary at a higher price, to the detriment of customers. He pointed out that it is possible.
AMF observed a wide range of practices regarding the provision of market data on a “reasonable commercial basis”, a core principle of the ESMA Guidelines. Identified poor practices include market data policies and fee schedules that do not differentiate between the costs of producing and distributing market data; This includes not disclosing the methods used. Among the shortcomings pointed out, the regulator said that some companies were charging different fees for the same use of market data to different categories of customers according to undisclosed criteria, thereby making market data useless. It also found that there was a violation of the principle of providing for discrimination. Basics. Additionally, the reasons for refusing to release individual market data have not been made public.
Regarding the free provision of delayed data, AMF identified several examples of poor practices, including making data available for a shorter period of time than recommended by ESMA guidelines. In contrast, all four companies make their delayed data publicly available in machine-readable format, which is a good practice.
Based on the lessons learned from this new SPOT inspection, AMF hopes to significantly strengthen and improve the operational coverage of systems in place at companies involved in the provision of market data.
About AMF
The AMF is an independent public body responsible for ensuring that savings invested in financial products are protected and that investors are properly informed. The AMF also oversees the orderly operation of the market. Visit our website https://www.amf-france.org/en.
