LONDON (Businesshala) – Poor trading data is hampering EU capital markets, a senior bloc official said on Friday, dismissing any radical reform in securities rules before the data improved.
Banks and stock exchanges are at loggerheads over changes being made by Brussels to the European Union’s bond and stock trading rules, known as ‘MiFID II’.
Exchanges want a 15-minute delay in how their prices are published to markets in a planned “consolidated tape” of entire transactions, while asset managers and regulators want real-time publication.
Stock markets also want stricter rules for trading away from mainstream platforms, but banks say such moves are unnecessary as most trading takes place on exchanges. Banks say the data showing the volume of trading from exchanges is inflated by ‘technical’ trades that have no effect on prices.
“We are not going to make overly radical decisions before we have a more complete picture,” said EU executive, Tilman Lauder, head of securities markets at the European Commission, at an event organized by European markets lobby AFME.
The Commission’s proposals to amend the MiFID II are due before the end of the year as the bloc looks to deepen its capital markets after Britain’s exit last December.
Luder said that retail investors, the key to the bloc’s capital market deepening, are “third-tier” participants who can afford real-time prices compared to deep-pocketed players because of the gap in the prices they receive.
“We need to get retail more involved and the only way to do that is to give them information parity with the rest of the market,” Luder said.
“Our proposal will leave a lot of scope for private initiative, and a lot of scope for people to register as providers of tapes to receive harmonized data, whether they want to provide it on a delayed basis or on a real-time basis. Yes,” said Lieder.
“I think we should also leave the market to make some decisions here.”