FIA European Principal Traders Association (FIA EPTA) looks forward to the draft report on the proposed revision to the Markets in Financial Instruments Directive (MiFID) and the proposal for the Markets in Financial Instruments Regulation (MiFIR) by MEP Markus Ferber. FIA EPTA fully supports the European Commission’s stated objective in these proposals of safeguarding the efficient functioning and integrity of markets.
“We strongly believe that regulation should be about the safe and sound functioning of markets and should promote transparency. We also believe that a level playing field for all market participants is essential to the proper functioning of markets. We support proposals that will strengthen the working of the market and believe that all investment firms, whether engaged in automated trading or not, should be required to have in place systems and controls to minimise the risks of trading,” Remco Lenterman, chairman of FIA EPTA, said.
“We would however be concerned by any proposals that could undo the good work to date on regulatory reforms -- such as the introduction of minimum resting periods, which could result in a decrease in liquidity by hampering effective risk management. We will continue to engage constructively with the European Parliament and all other political stakeholders in the interest of achieving better financial regulation for the benefit of all,” Mr Lenterman said.
FIA EPTA believes that automated trading technology has been pivotal in improving market quality over the last decade. Academic research shows that it has increased liquidity, lowered spreads, reduced the cost of trading and enhanced market efficiency. As a result of automated trading technology, post-trade costs have gone down by over 50% and volatility has been dampened. Automated trading technology has proven its social utility by transferring risk in capital markets in a more effective and efficient way as well as lowering the costs of accessing of capital markets for corporates and issuers.