European Stock Exchange Trading Reports In Europe Are Inaccurate, Industry Says
The bulk of equity trading in the European Union takes place on exchanges with relatively few internal banks, an industry body said on Tuesday in a bid to shut down what it called stock exchanges seeking to “perpetuate their domination “.
EU revises its rules for trading stocks and bonds, known as MiFID II, sparking a battle between exchanges and their main clients, banks and large asset managers, over competition .
ESMA, the EU’s securities regulator, has estimated that almost half of all transactions take place outside a stock exchange, prompting stock exchanges to demand that this part of the market be facing tighter restrictions so that more trading takes place on ‘enlightened’ venues like major exchanges.
But the Association for Financial Markets in Europe (AFME), which represents wholesale market players such as banks and investment firms, said a report commissioned from consulting firm Oxera shows that 83% of Stock trading is done on completely transparent platforms such as stock exchanges, with only 17%. inside banks or other over-the-counter platforms.
Oxera said it has removed “technical trades”, which represent a significant portion of over-the-counter trading but do not determine prices in general, to give a true picture of the underlying activity.
AFME chief executive Adam Farkas said the report showed how raw data from ESMA can be used to misrepresent the business landscape and influence policy making, with the risk of perpetuating the domination of trade in stock trading.
The row over statistics has led the EU’s executive commission to say it will first explore what it calls a “dog dinner” of trade data before deciding on any rule changes later this year. year.
Much of Europe’s over-the-counter trading was based in Britain, which left the EU on December 30, leading to the departure of trading segments to the City of London for Amsterdam, making the Dutch capital the largest stock exchange center in Europe.
The share of UK sites in overall European business activity has grown from around 40% in the first quarter of 2020 to around 20% in the same quarter of this year, Oxera said.
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