Providers of data reporting services
The expansion of the license obligation under MiFID II is an important part of the revision of MiFID I. In order to ensure high-quality market data, MiFID II introduces new parties that are required to have a licence. This concerns parties that offer data reporting services. These parties are subject to continuous supervision and must have a licence.
The service providers are, in principle, independent parties; however, investment firms or market operators may also offer data reporting services provided that they comply with the rules that apply to providers of data reporting services.
A distinction is made between the following services:
An APA has a license for providing services in the field of the publication of transaction reports on behalf of investment firms that settle transactions outside of a trading venue. A CTP has, in brief, a licence for providing services in the field of collecting market data that are published by trading venues and via an APA and for making this data available to the market in a consolidated form. An ARM has a license for providing services in the field of reporting the details of transactions to national supervisors or ESMA on behalf of investment firms. Different organisational requirements apply for the providers.
Until 1 January 2022, data reporting services providers acted under the supervision of the national competent authorities such as the AFM. Since that date, supervision has transferred to ESMA. Exceptions are the APAs and ARMs whose activities are of limited relevance for the internal market. This is the case when the entity is relatively small and only active in a limited number of countries. In such a case, the AFM supervises the entity and the AFM is the authority that grants the license.