Huw Jones

LONDON, (Reuters) – Poor trading data hampers the European Union’s capital markets, ruling out radical reforms to securities regulations before statistics are improved, a top official of the bloc stated on Friday.

The EU’s changes to its bond and stock trading rules (knowns as MiFID II) are causing friction between stock exchanges and banks.

While exchanges prefer a delay of 15 minutes in publishing their prices across all markets, in a “consolidated tape”, which is a compilation of transactions that have been completed, regulators and asset managers want immediate publication.

Although bourses also demand stricter trading rules, banks argue that such measures are not necessary since most trading takes place on exchanges. The banks claim that figures showing high volumes of trading occurring off exchanges are being inflated by “technical” trades, which have no effect on the prices.

Tilman Luder, head, Securities markets, EU executive, said that before we can have a full picture we won’t take too radical decisions. He was speaking at an event organized by AFME (European markets lobby).

The Commission has to submit proposals for amending MiFID II before the year ends. This is because the bloc wants to strengthen its capital markets after Britain’s December exit.

Lueder stated that retail investors are key to deepening Europe’s capital markets. However, they have a slower price response than deep-pocketed participants who are able to afford the real-time prices.

Lueder stated that “we need to get retail more involved” and suggested that information sharing with other markets is the best way.

Lueder stated that the proposal would allow for private initiative and allow people to sign up as providers of tapes to obtain harmonised information, regardless of whether they wish to do so on a delayed or real-time basis.

“I think that we should give the market some time to make some decisions.”