The European Commission’s proposal on MiFIR establishes the blueprint for a consolidated tape (CT) for Europe’s capital markets. It also significantly alters the competitive market structure brought about by MiFID II by introducing greater transparency requirements. Finally, it addresses important issues around market data costs.
Capital markets
Investment managers, acting on behalf of their retail and institutional clients, are among the largest investors in financial markets. They represent a key component of the market’s “buy-side” segment.
In representing the interests of its members on wholesale capital market issues, EFAMA advocates for fair, deep, liquid, and transparent capital markets, supported by properly regulated and supervised market infrastructure.
EFAMA position MiFIR review - a buy-side view on consolidated and market structure reforms
IOSCO Consultation on 'Review of margining practices'
We commend the work that IOSCO has undertaken to date on this topic including the survey work and the summary findings in the form of the report currently under review. It is fair to say that the conclusions of the report and areas for further work gave rise to detailed discussions within our industry, yielding ultimately firm views on the priority areas that we support and see value in, and areas we felt were not reflected in the study and thereby building risk into margining models in future crisis scenarios. These areas are fur
ESMA consultation on the review of clearing thresholds under EMIR
For asset managers the main issue continues to be the reclassification of ETDs as OTCs as a result of the non-equivalence of UK regulated markets. While we understand that a review is legally mandated at this point in time, we do not see value in recalibrating the various thresholds or making changes to the calculation methodologies unless these are in the two areas we define below. Our main concern revolves around the fact that changes would carry significant compliance costs while making little impact on the population of counterparties and notional captured by the thresholds.
An appropriately constructed Consolidated Tape could help to build deeper and more open capital markets in Europe
EFAMA and EFSA welcome the publication of a Market Structure Partners Study on the Creation of an EU Consolidated Tape which addresses the challenges, demand, benefits and proposed architecture for consolidating European financial market data.
Speech by Tanguy van de Werve at CMVM Annual Conference on 8 October 2020
CMVM 2020 Conference – 8 October 2020
EFAMA calls for changes to investor protection rules in MIFID II / MIFIR Review
EFAMA has submitted its response to the European Commission's consultations on the review of the MIFID II / MIFIR regulatory framework, where it has outlined its recommendations on investor protection and capital markets and infrastructure.
EFAMA's Director General Tanguy van de Werve commented:
Household Participation in Capital Markets
This report analyses the progress made in recent years by European households in allocating more of their financial wealth to capital market instruments (pension plans, life insurance, investment funds, debt securities and listed shares) and less in cash and bank deposits. It also includes policy recommendations on improving retail participation in capital markets, including for the Retail Investment Strategy currently under discussion.
Some key findings include:
Buy-side use-cases for a real-time consolidated tape
A real-time consolidated tape, provided it is made available at a reasonable cost, will bring many benefits to European capital markets. A complete and consistent view of market-wide prices and trading volumes is necessary for any market, though this is especially true for the EU where trading is fragmented across a large number of trading venues. A real-time consolidated tape should cover equities and bonds, delivering data in ‘as close to real-time as technically possible’ after receipt of the data from the different trade venues.
Visual | Why do we need a real-time Consolidated Tape in the EU?
The current lack of quality pre- and post-trade data and the fragmentation of data sources remain an obstacle to the completion of the Capital Markets Union. The benefits of a real-time Consolidated Tape are wide-ranging: from market surveillance for supervisors, to best execution and an improved view on trading opportunities for retail investors, to portfolio management and pre- and post-trade analysis for fund managers to name a few.