A trio of trade associations have called on lawmakers to consider the evidence and not succumb to market pressure in the upcoming MiFID review to be conducted by markets regulator Esma along with the European Parliament and European Commission.
The joint statement from the Association for Financial Markets in Europe (AFME), the European Fund and Asset Management Association (EFAMA) and the German Investment Funds Association (BVI) asks the policymakers to take “an evidence-based, ambitious approach” to the review.
Furthermore, the trade associations state extra time to complete the tripartite negotiations would be preferable to “suboptimal outcomes”.
Policymakers will bear the responsibility if EU capital markets continue to fail their users, states the letter, referring to the investment flows leaving the EU and the EU companies looking beyond Europe for their IPOs.
Of particular concern is the prospect of a consolidated tape for equities – something that asset managers have pressed for over a period of years but have yet to see come to fruition.
Unless a consolidated tape includes five levels of real-time pre-trade data and is reasonably priced, it will be “useless for the potential customers and not commercially viable for the operators”, state the associations.
“EU policymakers already failed to effectively deliver the consolidated tape once, in 2018,” states the associations’ letter. “We, therefore, urge the co-legislators and the Commission not to be complacent by conceding to the loudest voices of established interest parties, and to rise to the challenge of delivering efficient, more integrated, and globally competitive EU equity markets.”
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