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Esma to take on market data providers

DataThe European Securities and Markets Authority (Esma) has taken on a mandate to directly supervise the EU’s largest market data providers.

The new role will give Esma greater authorisation and supervisory powers

According to Esma chair Verena Ross the move will “contribute to increasing financial markets’ transparency”.

Esma will work alongside national regulators to “further enhance the quality of market data across the union” added Ross.

The announcement comes weeks after the UK’s Financial Conduct Authority launched two market studies to look at the access to the wholesale data market. Of particular concern to the FCA is the lack of competition among providers of indexes, credit ratings and trading data.

The high cost of market data has also become a concern for regulators and participants alike.

A report released this week by the Association for Financial Markets in Europe found that the costs of trading data for the bonds has grown by 50% over the last five year. Furthermore, the report concluded that this rise was largely due to providers increasing their prices rather than an increase in demand.

And back in June 2020, Europe's trade association Efama called for action over what it termed "excessive" market data costs

Esma also revealed that it has developed its own IT system "based on big data technologies" to support its new supervisory role by processing and storing the large volumes of transaction data it has gathered through its MiFIR reporting requirements.

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