The Association for Financial Markets in Europe (AFME) has responded to the European Parliament’s recent approval of the MiFIR/MiFID II review. Expressing support for the establishment of EU-wide consolidated tapes, which the approval will set into motion, the association nevertheless emphasised that more could be done to contribute to the success of a Capital Markets Union (CMU).
Addressing the requirement for the European Securities and Markets Authority (ESMA) to assess the effectiveness of a consolidated tape for shares, AFME recommended that the equity pre-trade tape be expanded to include five levels of depth of the order book “at an appropriate time”. The enhancement would be “technically possible” and “the most valuable option for the future subscribers to the tape, providing them with a wide range of non-latency sensitive use case”. In addition, it would “ensure the commercial viability of the consolidated tape provider”.
In his statement, AFME CEO Adam Farkas pointed out that “EU capital markets remain underdeveloped in comparison to the size of the EU economy and the EU’s global counterparts”. EU institutions and member states must therefore “come up with transformative actions to attract more investors, increase liquidity, improve the functioning of secondary markets, ensuring the seamless and integrated functioning of a single European capital market”.