• Home
  • News & views
  • Blogs
  • Publication

    Best Execution

    • Current issue
    • Back issues
    • Profiles
    • Viewpoint
    • Topics
    • Supplements
  • Partners
  • Listings
  • Events
  • About us
    • Contact
    • Media info
    • Marketing
    • Login
  • Home
  • News & views
  • Blogs
  • Publication
    • Current issue
    • Back issues
    • Profiles
    • Viewpoint
    • Topics
    • Supplements
  • Partners
  • Listings
  • Events
  • About us
    • Contact
    • Media info
    • Marketing
    • Login
HomeBestEx TopicsEquities tradingNews review : ESMA takes a balanced view on period ...
Previous Next

News review : ESMA takes a balanced view on periodic auctions

Posted by: Best Execution , July 29, 2019

ESMA TAKES A BALANCED VIEW ON PERIODIC AUCTIONS.

Market participants heaved a sigh of relief after The European Securities and Markets Authority indicated it would not introduce stringent restrictions on periodic auctions which have come under fire for allegedly undermining stock market transparency rules.

The European regulator has been reviewing these venues which allow fund managers to trade larger blocks of shares while limiting the amount of order information revealed to the market before trades take place. They are seen as an alternative to anonymous venues known as dark pools although some critics most notably Markus Ferber, an architect of MiFID II who sits in the European Parliament, complained that they were a “blatant attempt to undermine the EU rulebook”.

His main objection was that they were being used to mimic dark pools, which had caps placed on them by the new regulation in a bid to move more trading onto traditional stock exchanges, which offer more pre-trade transparency.

They have grown in popularity since MiFID was implemented with research from Tim Cave, a research analyst at TABB Group showing that volumes initially surged at MiFID II’s inception but have since settled at around 2.2% of the order book market. There are currently seven periodic auctions although Cboe Europe has the lion’s share of volumes.

Operators were worried that ESMA would take a hard line but instead the regulator issued a report that said it only intended to set out guidelines for ensuring the auctions meet MiFID II rules on price formation and transparency.

ESMA said it will act to ensure the auctions are used to establish prices for shares rather than simply matching orders at prices formed on primary stock exchanges. It also called on operators to notify traders when auctions begin for “genuine pre-trade transparency”.

Mark Hemsley, chief executive of exchange Cboe Europe, described the regulator’s report as “pretty balanced.” He said: “Periodic auctions have been given a relatively clean bill of health. Now that the regulatory uncertainty is starting to lift, they may grow accordingly. We need to see what guidance emerges from the regulator now but the framework is pretty positive.”

Cave added: “ESMA adopted a considered approach to a new and complex area of Europe’s equity market under MiFID II.”

©BestExecution 2019

Back to Top

Tags: Cboe Europe, European Securities and Markets Authority (ESMA), Mark Hemsley, Markus Ferber, TABB Group, Tim Cave

Share!
Tweet

Best Execution

About the author
mm

Related Posts

Data management : Market data : Heather McKenzie

THE MARKET DATA CONUNDRUM. Heather McKenzie assesses the market data landscape and the persiste ...

Regulation & compliance : SFTR : Lynn Strongin Dodds

THE LONG AND WINDING ROAD OF SFTR. Lynn Strongin Dodds looks at the state of play and whether f ...

Viewpoint : Neena Dholani : FIX Trading Community

THE CONSOLIDATED TAPE – IT’S NOT EASY BUT WITHOUT STANDARDS IT IS IMPOSSIBLE. Neena Dholani, Gl ...
Peter Moss, SmartStream

Viewpoint : SFTR : Peter Moss

SECURITIES FINANCING TRANSACTION REGULATION. Gathering the data required to complete Securities ...

Leave a Reply Cancel reply

You must be logged in to post a comment.

Recent
  • Plato launched Platometrics to provide complete pi ...

    December 3, 2019

    Digital Transformation: The Capital Markets Innova ...

    November 5, 2019

    Buyside profile : Gianluca Minieri : The liquidity ...

    October 22, 2019

    Profile : Charlotte Crosswell : Innovate Finance

    October 22, 2019

    Viewpoint : Neena Dholani : FIX Trading Community

    October 22, 2019

Menu

  • Home
  • Publication
  • Topics
  • Events
  • Partners
  • Listings
  • Privacy notice
  • About us

In these uncertain times and as the tide of regulation rises ever higher and wider, Best Execution offers an in-depth analysis into the major trends that are shaping the financial services industry as well as providing a more detailed insight into the technology driving new products and services being developed to meet these challenges.

Where the buyside and sellside meet.

Wikipedia: Best Execution

Social

linkedin
Copyright © 2019 Best Execution | Site by Refractiv.
  • Home
  • Publication
  • Events
  • Privacy notice
  • Login