EU lawmaker proposes market data waiver for smaller bourses (updated)

Gielda Papierow Wartosciowych w Warszawie SA

22/07/2022 15:54

(Adds FESE stock exchanges industry body comment)
    By Huw Jones
    LONDON, July 22 (Reuters) - Smaller stock exchanges in the
European Union should be exempt from having to supply market
prices to a real-time record of transactions for investors, a
senior EU lawmaker has proposed.
    An EU draft law is mandating "consolidated tapes" to mesh
stock, bond and derivatives markets spread across 27 countries
by forcing platforms to supply prices as close to real time as
possible to investors.  urn:newsml:reuters.com:*:nL8N2SG4KL
    The aim is to enable investors to find the best deals.
Exchanges want a 15-minute delay before the mandatory handing
over of their data. Banks and investment funds say a tape will
be of no use if not in real time.
    The plans pit exchanges like Deutsche Boerse  DB1Gn.DE  and
Euronext  ENX.PA , keen to keep control over data, against asset
managers and banks who say that data on share trades is too
expensive -- a complaint rejected by exchanges.  urn:newsml:reuters.com:*:nL8N2UD5DQ
    The European Parliament and EU states will have the final
say on the proposed legislation.
    Danuta Huebner is leading negotiations on parliament's side
and will propose exempting platforms which represent less than
1% of total EU daily trading from supplying prices to the tape,
an excerpt from her upcoming report, leaked to the press, said.
    Platforms which "do not contribute significantly to the
fragmentation of EU markets" would also be exempt, but bourses
that do not make use of an exemption should get a higher share
of the tape's revenues.
    Smaller bourses, such as in eastern Europe, would benefit if
the amendment is backed by parliament and EU states.
    In a move banks will welcome, Huebner, who had no immediate
comment, backed the draft law's provision for a tape giving
real-time prices.
    It was also "essential" that the share tape contains
"pre-trade" information, the excerpt says, a step industry
bodies like the Association for Financial Markets in Europe
(AFME https://www.afme.eu/news/press-releases/details/AFME-BVI-Cboe-Europe-and-EFAMA-Agree-Cross-Industry-Consensus-on-EU-Equity-Consolidated-Tape)
 have called for. The draft law only refers to "post-trade"
prices or completed transactions.
    FESE, which represents exchanges in Europe, said the
proposals would further concentrate share trading among large,
non-EU investment banks.
    "We will continue to advocate for a package of market
structure measures... but not one that publishes pre-trade data,
creating an illusory view of the market," FESE said.
    The efficient functioning of Europe's markets is now even
more critical to fund the economy given the financial impact of
war in Ukraine, said AFME CEO Adam Farkas.

 (Reporting by Huw Jones; Editing by Susan Fenton)
 ((huw.jones@thomsonreuters.com; +44 207 542 3326; Reuters
Messaging: huw.jones.thomsonreuters.com@reuters.net))