Calls for European politicians to tighten up new rules to limit the fees stock exchanges charge for their data have grown louder, with the Dutch and German asset management trade bodies joining their UK and Brussels-based counterparts in coming out against the proposals as tabled.
Hans Janssen Daalen, director general of the Dutch Fund and Asset Management Association, or Dufas, wrote to prominent MEPs including the UK’s Kay Swinburne and Germany’s Markus Ferber on June 17, asking them to reject market data provisions included in a revised version of the EU’s Markets in Financial Instruments Directive, or Mifid II.
Daalen said the European Commission’s provisions designed to ensure market data fees had a reasonable commercial basis were “set so loose” they were “meaningless”, echoing the stance taken in a June 9 letter to politicians from the Brussels-based European Fund and Asset Management Association, which had said the criteria proposed would effectively render the obligations under the new regulation “void”.
The Commission rules, published on April 25 – which face final scrutiny from the European Parliament and the European Council – stated that the price of market data should be based “on the cost of producing and disseminating such data and may include a reasonable margin”.
Exchanges would also have to publish their cost methodologies, as well as price lists and the proportion of revenues accounted for by data sales, so they could be held to greater public account for fees.
The German fund association, BVI, also sent an email to European Parliamentarians on June 14, urging them to consider rejecting the proposals as they do not provide sufficient transparency for users of exchange data on the actual costs incurred by exchange operators.
A spokeswoman for the BVI confirmed the e-mail and said it “fully supported” Efama’s call for a rejection of the standards.
It was the Investment Association, the trade body representing UK managers with more than £5.5 trillion in assets, that first took umbrage at the rules published by the Commission, before Efama voiced its own opposition.
The market data provisions have been one of the most contentious issues of Mifid II, pitching traders and end investors – the major consumers of data that they also argue they create in the first place – against distributors of market data, principally stock exchanges for which information services, such as real-time data, are a lucrative revenue stream.
However, FN reported on June 10 that European politicians responsible for rubber-stamping the regulations under Mifid II had warned there was little chance of changes to the standards at this late stage in proceedings.