Market Model Typology

The Market Model Typology (MMT) initiative is a collaborative effort established by industry participants to improve the quality of post-trade data through the use of standards for post-trade transparency. The work conducted has built on some earlier advice from ESMA’s predecessor CESR.

In the context of changing EU regulation, MiFID II introduced regulatory intervention to improve post-trade information and reduce costs. EU regulation aimed to:

  • Improve the quality of raw data and ensure it is provided in a consistent format through more standardised trade reports and by mandating OTC trade publication via an APA (Approved Publication Arrangement)
  • Reduce the cost of post-trade data for investors through unbundling of pre- and post-trade data
  • Introduce a European Consolidated Tape

MMT introduces a standard set of codes for equities post-trade data, making it easier for market data to be compared and consolidated by investors.

MiFID II called for provision of consolidated post-trade data to be available for an instrument from all the EU venues where it is traded, on- or off-exchange. So, rather than participants having to consolidate this data from numerous sources themselves, data would be available as a consolidated tape. Standardisation of trade data is a pre-requisite for effective data consolidation and the MMT industry standard maps legacy trade flags to a common code.

MMT takes the form of a data model and cross reference table which maps trade flags across securities exchanges, MTFs and OTC reporting destinations to a set of standard single character enumerations (the native code includes 14 characters) and is currently endorsed by trading platforms and reporting venues, as well as the major market data vendors and some market participants.

MMT has gained industry support and its broad implementation is envisaged under FIX Trading Community governance. ESMA is aware of the MMT standard and market participants have generally indicated support of adoption. Whether this will lead to regulatory endorsement of the MMT under the review of MiFID II is yet to be seen.

Last updated 24th April 2020

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