06 March 2007

ZKA comments on Non-Equities Markets Transparency

Commenting on the CESR call for evidence of non-equities markets transparency the ZKA notes that the allocation of responsibilities, in particular according to the better regulation approach, should be considered in this context. ZKA states that it is not the responsibility of the market participants to prove by submitting market-specific, detailed information whether or not markets are friction-free. It must be the responsibility of the legislator to justify its regulatory actions by providing convincing evidence of market failure.

Referring to the cover letter to the current consultation paper saying that the initial request to CESR was a 'limited fact-finding exercise in relation to cash bond markets', ZKA notes that “it is important to avoid any impression that this new and focussed examination alone is an indication of subsequent regulatory measures.”

“In the interest of all market participants, this examination should be open-minded. It is generally acknowledged that the European bond market is highly integrated already today and works efficiently. Therefore no direct analogous conclusions can be drawn from the MiFID provisions on shares with respect to the bond market.”

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