On 28 April 2022, the International Organization of Securities Commissions (IOSCO) published a report setting out some issues and considerations for regulators when reviewing the regulation of market data.
The report provides feedback on IOSCO’s earlier consultation report ‘Market Data in the Secondary Equity Market’ and offers the following considerations that regulators may find helpful in the regulation of market data by trading venues or over-the-counter:
- Pre-trade data and post-trade data are important in promoting transparency of trading. As appropriate, it is important to consider the elements of market data that are necessary to facilitate the ability of all market participants to effectively and fairly participate in secondary markets and to make informed investment, order routing and trading decisions. The needs of market participants may differ depending on factors such as, participants’ business model, market structure in the particular jurisdiction, or the type of participants in the market (retail, institutional, proprietary).
- Fair access to market data is an important consideration in the provision of market data to market participants. Fair access may cover issues including market data pricing, connectivity terms and pricing, and contractual arrangements. Market data is not interchangeable in all cases, and where appropriate, helping to ensure fair access across different execution venues is an important consideration. In addition, the extent to which access to free or delayed data can meet the needs of some participants may be a useful consideration.
- Where appropriate, consolidation of data may improve access to market data and may, in some circumstances, be useful in helping to reduce costs of market data, identify liquidity and compare execution quality in jurisdictions where there may be fragmented liquidity.