European market connectivity provider Equiduct has published a second white paper in a planned series of six free documents written by industry experts.
Entitled “Market Transparency: Is this the CESR Liquid List?”, it can be downloaded from www.equiduct.eu.
Written by Andrew Simpson, the paper aims to identify the importance of the CESR Liquid List, and to highlight unanswered questions around its construction. The paper also puts forward a case for an extended list that could serve as a reporting point and an indicator of the health of EU economy as a whole.
The paper contrasts the likely CESR liquid list with existing European Equity Indices. Author Andy Simpson believes CESR will build the list by looking at shares from each of the 27 European Member States and establishing whether they are `liquid¹ as defined by Article 22 of the MiFID regulation. He also speculates whether the list will be the CESR598 or CESR622 and comments on the potential need to extend the CESR list to all 1,285 shares on the combined CESR and European Equity Indices liquid stocks.
“MiFID is all about levelling the field for all market participants across Europe, extending transparency including the delivery of pre- and post-trade data and opening the markets to competition,” says Equiduct CEO Bob Fuller. “This second white paper clearly shows how important the CESR liquid list will be in promoting price discovery and Andrew has produced a very clear analysis of the likely make-up of the CESR list. He clearly shows how the liquid list will provide a solid pan-European equity foundation, and details the likely impact of such a list for the market,” he adds.
“We expect the publication of the CESR liquid list to increase the attractiveness of pan-European equity trading which is why at Equiduct we have created a new execution venue that will help deliver on the MiFID vision and help organisations trade efficiently across current borders and deliver best execution in the pan-European market,” Fuller continues.
“The publication of the CESR liquid list is already increasing the attractiveness of European equities trading, and new execution venues will demonstrate the MiFID vision of a truly pan European market,” adds Simpson himself. “There is still a great deal of uncertainty about how CESR plans to construct its liquid list, so it is great that Equiduct has provided a platform for this debate in the run up to MiFID becoming law in November.”
Andrew Simpson is a management consultant who specialises in capital markets. He has been working with and advising on the MiFID text since January 2005, where he was part of the group at the FSA, the UK regulator, working on
aspects of its technical and business impact.
Equiduct aims to facilitate compliance with MiFID in the European marketplace by providing a single point of connectivity through its own pan-European regulated exchange, and through the provision of white label services to systematic internalisers or financial institutions that want to operate their own trading facilities. The Equiduct model guarantees execution at the lowest cost and at the best price in a less than 10 milliseconds.