Recital 17

(17)Terms and conditions relating to penalties and audits have been recognised as being excessively burdensome for market data clients and contributing to the increase of cost of market data beyond the cost of production and dissemination and a reasonable margin. To avoid unjustified penalties, penalties should be imposed only on the basis of evidence of infringement of the market data agreement. Furthermore, penalties should not be overly onerous, and their size should be based on the amount the client would have paid in case of compliance with the market data agreement. In addition, to enable the client to make timely arrangements to avoid the repetition of infringements of the market data agreement, the market data provider should impose the penalty within a reasonable time from the infringement occurrence. The reasonable time should not exceed five years from the date an audit is notified. That timeframe is in line with investment firms’ record keeping obligations laid down in Article 16 of Directive 2014/65/EU of the European Parliament and of the Council ⁴ .