By Huw Jones
LONDON, April 17 (Reuters) - Stock exchanges and asset
managers have squared off ahead of European Union negotiations
this week over how much information investors should be given to
find the best deals on Europe's fragmented stock markets.
The European Parliament and EU states begin negotiations on
Tuesday on finalising reform of the bloc's securities rules,
known as MiFID, aimed at making its capital market more
efficient now that if faces competition from a post-Brexit
London.
It includes mandatory contributions from trading platforms
to a "consolidated tape" or record of share prices, a
longstanding feature of U.S. markets. Proceeds from selling the
tape would be shared among the contributors.
In initial positions, parliament has backed a tape that
provides prices of completed share trades in real-time -
currently many investors only get delayed prices - and an
in-depth view of pre-trade prices on offer.
EU states have also backed a tape with completed share
trades in real-time, but with less comprehensive pre-trade data.
Exchanges, which earn money from market data, say parliament
is going beyond transparency to give investors a trading tool.
"The inclusion of real-time pre-trade data, as per the
European Parliament proposal... would only further distort EU
market structure," the Federation of European Securities
Exchanges (FESE) said in a statement last week.
But the Association of Financial Markets in Europe (AFME),
whose members include global banks and asset managers, said on
Monday that an "ambitious real-time pre-trade" tape would help
reverse the worrying trend of European stock markets being
"markedly less dynamic" than their U.S. peers.
The European Fund and Asset Management Association (EFAMA)
also backs parliament's position, saying liquidity in European
stock markets has contracted by 25% since 2013 compared with a
23% rise on U.S. markets, with a number of factors contributing
to this.
"One of these is undoubtedly the absence of a consolidated
equities tape without which a complex and fragmented EU27 market
is put at a competitive disadvantage globally when marketing to
international investors," EFAMA said.
The negotiations will also seek to iron out disagreement
over whether brokers should be banned from receiving commission
for sending stock orders to a specific platform.
(Reporting by Huw Jones
Editing by Mark Potter)
Messaging: huw.jones.thomsonreuters.com@reuters.net))
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