Trading venues face increased scrutiny on “unsatisfactory” MiFID II data submissions

ESMA will publish performance indicators on data submitted by trading venues for the double volume caps and bond liquidity assessments under MiFID II.

European trading venues are set to face increased scrutiny on the delivery of data for MiFID II requirements, after the EU regulator announced plans to publish timeliness and completeness indicators.

The European Securities and Markets Authority (ESMA) unveiled two new data completeness indicators for trading venues charting the performance of delivery of data for the double volume caps (DVC) and bond liquidity.

The two indicators will be published from 8 October (DVC data) and 1 November (bond liquidity data) with the aim of forcing trading venues to improve their provision of timely and complete data to ESMA, which it said is key in delivering MiFID II’s objective of increased transparency.

Consisting of the completeness ratio and the completeness shortfall, both indicators will compare the number of records received with the total number of records excepted to be reported, and compare a venue’s data performance with other venues.

“ESMA is committed to ensuring data completeness to facilitate the consistent application of the DVC and bond market liquidity rules across the EU. Moreover, we need to ensure a level playing field between trading venues,” said Steven Maijoor, chair of ESMA. “These goals can only be accomplished if the relevant data from trading venues is consistently complete and correct.”

Incomplete data submissions from trading venues has forced ESMA to delay the implementation of certain aspects of MiFID II, including the DVCs and the systematic internaliser regime for derivatives.

ESMA added that despite working closely with local authorities across Europe on improving the timeliness and completeness of data submissions, the current situation remains “unsatisfactory with significant data completeness issues”.

The regulator plans to roll out the performance reports monthly for DVCs and quarterly for bond liquidity.