Simon Gallagher, chief executive, London and head of global sales, Euronext
We think that the introduction of an anonymised, single-level pre- and post-trade consolidated tape will trigger innovations at trading venues. A key part of these innovations will be how retail orders are executed in Europe, as a consolidated tape becomes a benchmark for retail investors for best execution. We expect to see innovation in dark trading, which has not had a shake-up for a while, as AI is embedded into order matching algorithms, resulting in better execution outcomes.
If the current low-volume environment in Europe continues, tied to GDP and economic growth, we will see renewed effort from policy makers to address some of the structural problems in Europe. They will need to take the Capital Markets Union more seriously and remove the frictional cost of trading between countries. As the focus of regulation shifts from Brexit to competing and reducing fragmentation, we will see more constructive regulatory dialogue between the UK and EU, based on the recently signed Memorandum of Understanding (MoU) on cooperation in financial regulation.
Niels Brab, chief regulatory officer, Deutsche Börse Group
With a new EU legislative period on the horizon, a decisive year lies ahead that will be full of opportunities to advance on key challenges. In light of geopolitical realities, sluggish economic growth, and constraint public finances, it will be particularly critical for the EU to ensure a new vision in regard to the Capital Markets Union. Despite decades of efforts, the EU’s capital markets remain underdeveloped, and their size does not correspond to the magnitude of the EU’s economy.
A new vision should be paired with a profound reflection around the open strategic autonomy. We should learn from best practices and centrally embed them into our thinking. Establish an EU equity fund, revitalise our securitisation markets, boost our primary markets and IPO ecosystem, address fragmentation, tackle incentivisation elements like taxation – and ensure that citizens truly endorse our markets by guaranteeing a better participation.
Michael Robertson, head of UK consulting, Delta Capita
In 2024, the global capital markets landscape looks set for further transformational change. Against the backdrop of an uncertain macro-economic climate, we expect market disruption through convergent regulatory scrutiny, technology advancement and an ongoing focus on sustainability. Markets will be shaped by the impacts of a shortened settlement cycle. Whilst initial focus will be on T+1 in the US, governing authorities must weigh up the cost-benefit of an accelerated cycle whilst maintaining a stable, efficient, and competitive European capital market.
Technology advancement continues at a pace. Decentralised finance (DeFi) and tokenisation represent a paradigm shift in financial services and there is widespread expectation that AI will bring improved capital efficiency and risk management. Regulation must establish a framework that encourages innovation while protecting consumers and maintaining financial stability. Cyber security will remain a top priority to ensure the industry has defence mechanisms to safeguard sensitive data. ESG considerations will play an increasingly pivotal role. Institutions will integrate sustainability practices into their operations, reflecting a growing awareness of the environmental and social impact of investments.
Navigating this complex web of factors will require collaboration amongst industry practitioners, technologists and policymakers to understand, shape and design innovative solutions to common business problems.
Stephanie Eckermann, chief executive, Clearstream Banking AG
Securities services especially have been largely untouched by disruption in the last few years – partially due to protection of the industry by regulation. But we are seeing changes. We see the entire post-trade space becoming more and more of a platform business. The new digital securities world, and the new digital customer experience afforded by modern technology are driving this trend.
As we move into a world with digitisation, open API and the glue provided by hyperscalers, I envisage an interoperable platform of key market players, delivering a truly seamless global experience to investors. This experience will utilise advanced data tools to offer greater insight and enable better investment choices. To be the winners, platforms will need both the scale to fund the investments needed for change and the right culture to collaborate. Those that continue to operate behind their own protectionist garden walls will ultimately wither.