On 16 December 2024, the European Securities and Markets Authority (ESMA) issued a final report on technical standards related to consolidated tape providers (CTPs) and data reporting service providers (DRSPs).

Background

In May 2024, ESMA published a Consultation Paper presenting draft technical standards covering: (i) the input and output data requirements of CTPs, (ii) the revenue redistribution scheme for the equity CTP, (iii) the synchronisation requirements for business clocks, and (iv) the authorisation and organisational requirements for DRSPs. It also included ESMA’s initial reflections on the assessment criteria for the CTP selection.

Final report

In section 2 of the final report ESMA describes the draft regulatory technical standards (RTS) on input/output data relating to the mandate under Article 22b of MiFIR which requires ESMA to specify (a) the minimum requirements for the quality of transmission protocols, (b) the data to be disseminated by the CTP, (c) what constitutes as close to real time as technically possible, and (d) the data to be transmitted to the CTP. Compared to the consultation proposal, changes are introduced regarding input data formats, CTP’s responsibilities on input data quality and latency requirements.

Section 3 of the final report covers the draft RTS on the revenue redistribution scheme relating to the mandate under Article 27h of MiFIR which requires ESMA to specify the methodology relied on by the equity CTP to redistribute revenues to data contributors. The draft RTS also include the criteria under which the CTP can suspend data contributors from revenue redistribution. The final draft RTS also include several refinements to allow more flexibility to the CTP in the application of such scheme.

Section 4 of the final report deals with the draft RTS on clock synchronisation relating to the mandate under Article 22c of MiFIR which transposes the clock synchronisation requirement previously set out in MiFID II. ESMA’s draft RTS specify the level of accuracy to which business clocks must be synchronised, including UTC traceability requirements and maximum divergence levels. The final draft RTS largely align with the original proposal.

Finally, section 5 of the final report covers the technical standards on the authorisation of DRSPs relating to the mandates under Articles 27d and 27db of MiFIR. This includes ESMA’s proposal (i) to amend the existing RTS 13 (Commission Delegated Regulation 2017/571) and the related ITS to exclude CTPs; and (ii) for a new RTS and a new related ITS specifically for the authorisation of CTPs. ESMA’s approach from the consultation is largely maintained.

Next steps

After submitting the final report, the European Commission has three months to decide whether to endorse the proposed amendments to the RTS.

ESMA will launch the selection procedures for the bonds CTP on 3 January 2025, and for the equity CTP in June 2025.