IMA challenges ESMA over market data costs 22 December 2014London Reporter: Stephanie Palmer
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The Investment Management Association (IMA) has challenged the European Securities and Markets Authority (ESMA) on its guidelines for market data costs under MiFID II.
In a response to ESMA’s recent advice, IMA agreed that market data costs are too high, but suggested that a transparency-only approach to pricing is unlikely to bring about the desired effect.
Instead, it urged the European Commission to consider a combination of transparency and the use of Long Run Incremental Plus. This method is already used for mobile data roaming, ensuring that an exchange can cover costs while making an ‘appropriate’ mark-up.
IMA generally supported the rest of the advice. It supports ESMA’s proposal to deliver accessible disclosure of costs and charges throughout the manufacturing and distribution chain, while also leaving room for national regulators to determine the specifics.
In capital markets, IMA also backs efforts to introduce more transparency in buying and selling interests in capital markets, and committed to working towards rules that don't hold back market liquidity.
The response suggested that the best thing for investors could be a regulatory framework that ensures free and fair trading between European venues, thereby dismantling current National champions.
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