Press Releases

The European Securities and Markets Authority (ESMA), the EU securities markets’ regulator, has launched a public consultation on the development in prices for pre- and post-trade data and on the post-trade consolidated tape (CT) for equity instruments. MiFID II/MiFIR aims at ensuring fair access to and lowering the cost of market data and has established the legal framework for the provision of a CT. However, to date, no CT has emerged and, based on ESMA’s analysis, it appears that MiFID II has so far not delivered on its objective to lower the prices of market data.

ESMA’s consultation forms part of the reviews required by MiFID II/MiFIR. It aims to gather further information on the factors behind the cost of market data and the CT ahead of ESMA’s final report to the European Commission (EC).

Development in the prices of market data

The consultation paper (CP) assesses the development of prices for market data and the application of the main MiFID II/MiFIR provisions aimed at reducing the cost of market data: the requirement to publish market data on a reasonable commercial basis (RCB), the requirement to provide market data in a disaggregated format, and the requirement to make market data available free of charge 15 minutes after publication.

The CP presents a varied picture of recent developments in the price of market data as users and trading venues continue to disagree on whether the price for market data is reasonable. In data users’ view, market data prices are too high and have not decreased since the start of MiFID II/MiFIR in January 2018, while in some cases prices have significantly increased.

Market data users also stress that since January 2018, new market data fees have emerged, such as fees for SIs consuming data, fees for data used for risk management and market abuse monitoring purposes. At the same time, the majority of trading venues have a different perception of the development of market data prices, that, in their view, resulted in price adjustments, and not only increases.

Consolidated tape for equity instruments

MiFID II sets out the legal framework for operating a CT, however more than a year after its application, a CT is still to emerge in the EU. Despite calls from different market participants, highlighting the benefits such an initiative would bring, there remain several challenges that have prevented one emerging.

ESMA believes the lack of a CT provider can be explained by three main factors: no commercial rewards for operating a CT, a too restrictive regulatory framework, and competition from non-regulated entities. ESMA’s consultation also identifies some of the major considerations in setting up a CT, notably high data quality, mandatory contribution by trading venues and APAs to the CT and mandatory consumption of the CT by data users.

In addition, ESMA has identified several clear benefits a CT could provide. In particular, a CT would provide post-trade information on the trading activity for any equity and equity-like instrument in a single place and format. Finally, the consultation sets out different potential ways of establishing a CT should the EC and co-legislators decide to do so.

Steven Maijoor, Chair, said:

“Discussions on the cost of market data in the EU have been to the fore for many years with differing views expressed by trading venues selling this data and market data users buying it - MiFID II aims to change this landscape. 

“We have received a lot of feedback as to whether the price for market data is reasonable, in addition to concerns on price increases and new fees in an environment driven by technological development and a high demand for market data. This new consultation forms an important part of the reviews of MiFID II as we assess developments in this area.

“Establishing a consolidated tape in the EU has been discussed for many years. I believe it is time to decide if and how we want to go ahead with this ambitious project and ESMA is ready to provide support to the co-legislators on the right way forward.”

Next steps

The consultation closes on 6 September 2019 and, based on stakeholder feedback, ESMA will develop a final review report, which it intends to submit to the EC in December 2019.

The European Securities and Markets Authority (ESMA), the EU’s securities markets’ regulator, has today published a statement addressed to providers marketing, distributing or selling contracts for differences (CFDs) to retail clients. The statement is in response to various practices and situations observed in the market, which raise concerns of non-compliance with the legal requirements applicable when providing services to retail clients.

ESMA still has serious concerns about firms’ marketing, distribution or sale of CFDs to retail clients and considers it necessary to remind CFD providers about some of the requirements connected with the offering of CFDs. ESMA has identified undesirable practices related to:

  • Professional clients on request; and
  • Marketing, distribution or sale by third-country CFD-Providers.

Steven Maijoor, Chair, said:

“ESMA has acted in response to the significant investor protection concerns raised by the offer of CFDs to retail clients and adopted its own product intervention measures in 2018. To date, many NCAs across the EU have adopted similar measures but on a permanent basis.

Ensuring investors are protected necessitates that all CFD providers respect all applicable requirements and do not circumvent them using professional client status or third country entities.”

Professional clients on request

ESMA is aware that some CFD providers are advertising to retail clients the possibility to become professional client on request. Investment firms should strictly refrain from implementing any form of practice that incentivises, induces or pressures an investor to request to be treated as a professional client. In this respect, any form of promotional language in relation to the status of professional client shall be seen as incentivising a retail client to request a professional client status. This includes providing a comparison between leverage limits available to different types of clients and the provision of any form of rewards for becoming a professional client.

Marketing, distribution or sale by third-country CFD-Providers

ESMA is also aware that some third-country firms are marketing CFDs that do not comply with ESMA’s measures to retail clients in the European Union (EU), particularly through online advertising, and that EU firms are engaged in activities that are intended to circumvent ESMA’s temporary product intervention measures.

ESMA observes that some CFD providers established in the EU are marketing the possibility for retail clients to move their accounts to an intra-group third-country entity. ESMA notes that firms should not incentivise retail clients to start trading with an intra-group firm established in a non-EU jurisdiction.

ESMA clarifies in its statement that in the absence of authorisation or registration in the EU in accordance with MiFIR or with the national third-country regimes in force in various Member States, third-country firms are only allowed to provide services to clients in the Union at the client's own exclusive initiative. Furthermore, information in relation to the ‘benefits’ of trading CFDs with such an intra-group third-country entity could be seen as a circumvention of ESMA’s product intervention measures by the EU authorised firm.

Next steps

Firms must ensure that they are compliant with all applicable legislative requirements and with the relevant product intervention decisions, taking into consideration clarifications provided in relevant Q&As and the content of this statement. ESMA and NCAs will continue to monitor compliance of CFD providers with the product intervention decisions.

The European Securities and Markets Authority (ESMA), the EU’s securities markets’ regulator, has reappointed three current members of its Management Board for a further 2½ year term that will begin on 1 October 2019. The members current terms will expire on 30 September 2019.

The members current terms will expire on 30 September 2019. The appointments took place at the Board of Supervisors meeting in Paris on 11 July and are:

·         Robert Ophèle, Autorité des Marchés Financiers (AMF), France;

·         Sebastian Albella-Amigo, Comisión Nacional del Mercado de Valores (CNMV), Spain; and

·         Erik Thedéen, Finansinspektionen (FI), Sweden.

The Management Board, chaired by Steven Maijoor, Chair of ESMA, is responsible for ensuring that the Authority carries out its mission and performs the tasks assigned to it under its founding Regulation. The Management Board now consists of:

·         Steven Maijoor, European Securities and Markets Authority (ESMA);

·         Elisabeth Roegele, Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin), Germany;

·         Sebastian Albella-Amigo, Comisión Nacional del Mercado de Valores (CNMV), Spain;

·         Robert Ophèle, Autorité des Marchés Financiers (AMF), France;

·         Derville Rowland, Central Bank of Ireland (CBI);

·         Gabriela Figueiredo Dias, Comissão do mercado de valores mobiliários (CMVM), Portugal; and

·         Erik Thedéen, Finansinspektionen (FI), Sweden.

Extension of Standing Committee Chairs Terms

The Board of Supervisors also decided to extend the mandate of several standing committee chairs, which were coming to an end in in September 2019, until January 2020. This was done in the context ESMA’s forthcoming work on the implementation of the changes associated with EMIR 2.2 and the ESAs Review which will involve reviewing the Standing Committee

The standing committees and chairs concerned are:

·         Committee for Economics and Markets Analysis - Carmine Di Noia, (CONSOB, Italy);

·         Corporate Finance Standing Committee - Benoît de Juvigny (AMF, France);

·         Corporate Reporting Standing Committee -  Ana Martinez Pina (CNMV, Spain);

·         Market Integrity Standing Committee - Nicoletta Giusto (CONSOB, Italy);

·         Financial Innovation Standing Committee - Jean-Paul Servais (FSMA, Belgium);

·         Investor Protection and Intermediaries Standing Committee – Evert van Walsum (ESMA) interim until new chair appointed;

·         Post-Trading Standing Committee - Robert Ophele (AMF, France);

·         Secondary Markets Standing Committee - Elisabeth Roegele (BaFIN, Germany); and

·         Commodity Derivatives Task Force   Elisabeth Roegele (BaFIN, Germany).

ESMA’s standing committees are expert groups drawn from ESMA staff and the national competent authorities for securities markets regulation in the Member States and are responsible for the development of policy in their respective areas.

The European Securities and Markets Authority (ESMA) has published today a report on its preliminary findings on multiple withholding tax (WHT) reclaim schemes, following a European Parliament (EP) request, and has launched a formal inquiry to gather further evidence from national competent authorities (NCAs) on the supervisory practices regarding those schemes across the European Union (EU).

Some EU Member States allow for a WHT on the dividends of listed companies, which under specific circumstances can be reclaimed. This can be abused by aiming to obtain multiple repayments of a single WHT paid upon distribution of dividends, ESMA analysed the incidence of these schemes and whether they result in a violation of the Market Abuse (MAR) or Short Selling Regulation (SSR), while identifying potential supervisory responses. To identify these schemes, ESMA analysed EU cash trading and securities lending volumes that showed increased trading activity around dividend dates.

Overall, the Report found, among other things, that the execution of these schemes do not necessarily imply a breach of the provisions of MAR or SSR. However, there could be concerns about compliance with share trading reporting obligations. In addition, the Report found that:

·         dividend arbitrage trading can be carried out through a wide range of sophisticated and complex trading methods giving the impression that a series of genuine claims have taken place;

·         the schemes involve high volumes of trading in the outstanding shares of large capitalisation EU index stocks, since the schemes are more profitable when carried out on a large scale;

·         the schemes appear to be aimed mainly at obtaining multiple repayments of a single WHT paid upon distribution of dividends (i.e. potentially involving a tax fraud) often using a short selling transaction; and

·         some national tax laws allow for the issuance of tax certificates that do not contain any reference to the underlying distribution of dividends, making it difficult to identify multiple fraudulent requests.   


In relation to the MiFID II framework, based on the information that has emerged so far, these tax schemes do not necessarily imply a violation of MiFID II. Information on the illegality of a given practice and on the degree of involvement of the supervised entities and their directors in specific cases should be the basis to determine whether certain MiFID II requirements have been breached.

Steven Maijoor, ESMA Chair, said:

“ESMA has looked into multiple withholding tax reclaim schemes from a securities markets perspective. While these schemes do not necessarily imply breaches of the market abuse or short selling regimes, they may affect the integrity of securities markets and individual firms.

"ESMA has identified best practices that could be used by NCAs to detect and investigate multiple withholding tax reclaim schemes. In addition, we have launched a formal inquiry to further collect evidence on NCAs’ supervisory experiences.”

Strengthening supervision and cooperation 

ESMA has identified best practices that could be used by NCAs to detect and investigate multiple WHT reclaim schemes. These include:

·         setting up calibrated alerts in surveillance systems to detect cases where the percentage of traded shares of an issuer reaches a significant level, or perform selective analysis around the dividend distribution dates for possibly relevant issuers;

·         using central securities registers data on settlement, transactions and short selling data on short positions to check matching transactions;

·         liaising with central securities registers and tax authorities to understand the totality of available data; and

·         conducting further firm-specific investigations if need be.


However, as NCAs have different legal mandates, responsibilities and powers it may not be possible for all practices to be adopted uniformly. In addition, further cooperation and mutual assistance between NCAs, tax authorities and other law enforcement bodies could help to prevent the continuation of these schemes and a clear legal basis is required for such cooperation. There is currently no legal basis in EU financial law, namely MAR, MiFID II and MiFIR, for NCAs receiving relevant information under these pieces of legislation to transmit it to the tax Authorities.

Formal Inquiry

ESMA, to build on its preliminary findings, has launched a formal inquiry under Article 22(4) of the ESMA Regulation, to gather further evidence from NCAs on:

·         potential threats to the integrity of European financial markets;

·         the nature and magnitude of actors in these schemes;

·         whether cases were found of breaches of either national or EU law;

·         the actions taken by financial supervisors in Member States, and

·         potential recommendations for action and reform to the competent authorities concerned. 

Next steps

ESMA will report on the results of this formal inquiry to the European Parliament.