06 March 2007

FBE response on non-equities markets transparency

Responding on the CESR call for evidence on non-equities markets transparency the EBF states that Europe’s banking community does not currently have evidence of market failure in the non-equity markets. Consequently, CESR could not justifiably conclude that policy intervention at this stage in respect of mandatory pre-trade transparency in the non-equity markets would be necessary.

The EBF also considers that now is not the opportune moment to consider a review the scope of MiFID before it has been fully implemented across Europe. It already called on the Commission to consider postponing any judgement and subsequent policy decisions in respect of transparency in the non-equity markets until the financial industry and regulatory authorities could make a fair assessment of the effectiveness of systems and the opportunities MiFID is designed to deliver.

Also, as non-equity products are not traded in the same way in all European jurisdictions, the EBF questions why it would be deemed appropriate to have European level action for markets that are organised in rather non-uniform ways and in multiple centres.

“Going to the core of the issue”, EBF states, ” we understand that the European Commission is primarily considering pre- and post-trade transparency in non-equity markets as a tool to protect retail consumers. If this is indeed the intention of the current review then the EBF believes that this rationale is fundamentally flawed.”

Document

© EBF