FIA EPTA agrees with ESMA’s suggestion to recalibrate the tick-size regime for instruments where the main pool of liquidity is located outside the EU (third country instruments). We believe that in order to ensure and preserve high-quality liquidity across financial markets, it is essential that all trading venues offering trading in a particular third financial instrument all apply to the same tick size for that instrument.
However, we do not agree that the most appropriate approach would be option (d), i.e., allowing the CAs of trading venues trading a third country instrument to coordinate and to agree on an adjusted ADNT that reflects the liquidity available on third country venues on a case-by-case basis. From the various options listed in the paper, we believe that only option (a), i.e., authorising EU trading venues to use the tick size applicable to the most liquid third country venue, would achieve the targeted policy objective. We have provided more detailed comments as to why this would be the preferred approach in question 1 & 2.