When Level 1 of the Market Abuse Directive (MAD) II was discussed two years ago there was talk of ESMA potentially establishing a massive centralised database for cross-market monitoring, aka the surveillance beast. Interestingly, this idea didn’t make it into the final MAR text. Instead it calls on each regulator to have in place the necessary tools for effective cross-market order book surveillance and to co-operate with each other. Also, the European Commission has to submit a report by June 2019 on the possibility of establishing a Union framework for cross-market order book surveillance. In other words, legislators will not consider the surveillance beast for the next five years.

In the meantime, ESMA focuses on harmonising the record keeping standards under MiFIR which will certainly simplify any exchange of data amongst competent authorities. That certainly sounds much cheaper than the US CAT system, estimated in the region of $530 million (down from previous estimates of $4 billion). Whether Europe sticks with a decentralised but standardised regime, or moves towards a more centralised monitoring system, remains to be seen, but given the continuous stream of new consultations published by ESMA this is a discussion that we can thankfully postpone.