Will financial market data be sufficiently consolidated and of high enough quality under MiFID?

Abstract

The opening up of the market for equity market data raises the question of whether data will be sufficiently consolidated and of high enough quality post-MiFID, or whether it will become too fragmented, thereby hindering price transparency and the implementation of best execution policies. This paper outlines the market for financial market data, the provisions of MiFID, and the implementing measures regarding financial data and data consolidation. It also looks at the approaches taken by the Committee of European Securities Regulators (CESR), the UK's Financial Services Authority (FSA) and the US authorities. It concludes that markets should be capable of adapting, that additional licensing requirements, such as those proposed by the FSA, are, in fact, premature and act as a barrier to the single market, and that neither would a US-style monopoly consolidator be needed in this case.