Industry association warns regulators that the ongoing Mifir Review could risk holding back EU equity markets; is calling for a diverse range of trading mechanisms in Europe.
The latest Equity Primary Markets and Trading Report from AFME also shows that equity underwriting on European exchanges declined 61% in 2022 – although average daily equity trading is up 9%.
Instead, the association has laid out its own recommendations which it predicts will protect the role of a market maker as a liquidity provider and banks as shock absorbers.
AFME’s report noted 62 new suspensions in Europe for surpassing pre-determined thresholds in April alone.
Association recommends that a better framework be laid out to measure settlement efficiency; warns against the impact of mandatory buy-ins on liquidity and competitiveness.
Industry association has hit out against proposed changes to the systematic internaliser regime in equities and transparency thresholds in fixed income.
Fixed income data costs are increasing faster than equities, finds the AFME report, and regulatory intervention such as a consolidated tape will do little to solve the problem on its own.
Competition in the new issuance technology space is increasing and the first steps to re-stitch the primary landscape will be to focus on automating a manual process and providing transparency, says Charlotte Decuyper.
The association said the European Commission’s definition of PFOF in its MiFID II amendments is vague and leaves potential loopholes for those trying to skirt the new rules.
Lobbyists highlight concerns around the market impact of simultaneous close-out of positions at UK CCPs, market fragmentation and lack of liquidity at EU CCPs, and increased costs.