LONDON, June 30 (Reuters) – Europe’s largest banks have urged regulators not to intervene in equity markets, saying there is no evidence that a decline \u200cin trading on traditional stock exchanges has harmed price-setting. <\/p>\n
The Association for Financial \u200cMarkets in Europe (AFME), representing banks including Deutsche Bank, Credit Agricole and Santander, as well as trading firms including \u200bCitadel Securities and Jane Street, warned on Tuesday that tightening rules on off\u2011exchange trading could backfire, damaging liquidity and leaving investors worse off. <\/p>\n
The European Securities and Markets Authority (ESMA), the EU’s securities watchdog, in April published the findings of a study on equity markets and \u200craised the prospect of legislative \u2060or regulatory measures to curb the continued decline in equity trading on stock exchanges. <\/p>\n
In Europe and the UK, the proportion of shares \u2060traded throughout the day on exchanges has been falling for several years, as investors increasingly use alternative mechanisms such as closing auctions and off-exchange transactions where prices are not always \u200bpublicly displayed. <\/p>\n
ESMA \u200bsaid in its paper that the trend \u200bwas not necessarily alarming on its \u200cown, but warned that if it persisted it could point to growing reliance on less transparent or less accessible trading mechanisms, potentially weakening how prices are set and reducing the reliability of benchmark prices for investors. <\/p>\n
The following month, Europe’s six largest economies proposed steps that regulators could take to curb the growth of trading within investment banks \u200cand proprietary trading firms. <\/p>\n
Their finance ministries said that, \u200bto level the playing field, banks and trading \u200bfirms should face stricter transparency requirements \u200band only handle retail orders if they can offer better prices \u200cthan those on public exchanges. <\/p>\n
In its \u200bresponse, AFME cautioned against \u200breducing investor choice regarding where trades are executed, and said any future action should be evidence\u2011based. <\/p>\n
Peter Tomlinson, head of equities trading at AFME, told Reuters: “Both Brussels \u200band London are focused on \u200cmaking markets more globally competitive and simplifying regulation. Adding more rules or \u200brestricting how and where investors trade is unlikely to support those goals.” <\/p>\n
(Reporting \u200bby Phoebe Seers; Editing by Edmund Klamann) <\/p>\n","protected":false},"excerpt":{"rendered":"LONDON, June 30 (Reuters) – Europe’s largest banks have urged regulators not to intervene in equity markets, saying…\n","protected":false},"author":2,"featured_media":82283,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[17808,10226,16967,22774,44093,4,15,32828,44094,5520,22836,42753],"class_list":["post-82282","post","type-post","status-publish","format-standard","has-post-thumbnail","category-europe","tag-afme","tag-credit-agricole","tag-deutsche-bank","tag-equity-markets","tag-equity-trading","tag-europe","tag-european","tag-european-securities-and-markets-authority","tag-exchange-trading","tag-investors","tag-regulators","tag-stock-exchanges"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/posts\/82282","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/comments?post=82282"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/posts\/82282\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/media\/82283"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/media?parent=82282"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/categories?post=82282"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/tags?post=82282"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}