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CESR published common European Standards for Alternative Trading Systems that have been prepared by an Expert Group chaired by Howard Davies, Chairman of the UK Financial Services Authority (FSA). The paper sets out standards for ATSs in the European Economic Area (EEA) with a view to providing appropriate regulation of investment firms operating ATSs under the current ISD. It builds on FESCO’s report to the European Commission on the Regulation of Alternative Trading Systems (ATSs) in Europe, which was published in September 2000.
After careful consideration of the comments received, the standards identify particular areas in which CESR believes that additional regulation is required to secure the two primary objectives of market integrity and investor protection:
Notification: the investment firm running an ATS should provide the competent authorities with information about the price formation process, rules of the system, system participants and the types of instruments traded.
Transparency: ATSs should comply with minimum transparency requirements.
Reporting Rules: additional reporting requirements should be imposed on ATSs to the extent needed to enable competent authorities to monitor market share of ATSs and changes to the information initially notified.
Prevention of Market Abuse: requirements placed on ATSs should make it possible to detect, deter and punish market abuse.
In order to follow the application of the standards in the different Member States, and maintain a continuous dialogue with investment firms operating qualifying systems, CESR has decided to establish an informal and specific contact group (‘Contact Group’) of relevant experts among CESR members.
Arthur Docters van Leewen, Chairman of CESR, said: “We are grateful for the thoughtful comments we received from all industry players throughout the consultation on regulatory standards for ATSs. We believe that these standards will be of use to regulators and market participants in clarifying the appropriate regulatory regime for investment firms operating ATSs in the period before the revised ISD enters into force. The standards will provide an efficient interim regime tackling the issues raised by multilateral ATSs. It will also help to ensure a level playing field, maintain confidence in the integrity of European financial markets and further develop the European single market in financial services.”
Standards for Alternative Trading Systems
Also published was a feedback statement summarizing the responses received in the final round of consultation. The note provides a brief summary of the key responses received to the second round of consultation, which ended on 15 March 2002, and explains where and how CESR has changed its proposals as a result.
feedback statement and responses - final round of consultation
© CESR - Committee of European Securities Regulators
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