FESE Response to the Commission consultation on the draft Delegated Act amending CDR 2017/567

FESE responded to the Commission “Have your Say” consultation on the draft Delegated Act (DA) amending CDR 2017/567 (here).

• The definition of liquid market is pivotal to the transparency of EU equity markets. The current thresholds proposed in the draft DA fall significantly short of actually fostering more liquidity in EU equity markets: in fact, the number of stocks that would be deemed liquid represents a very small percentage of the overall stocks admitted to EU markets.
• The proposed definition of liquid market (combined with the low proposed SMS threshold) results in problematic exemptions for SIs from most pre-trade transparency requirements. This may mislead both European and foreign investors into perceiving European liquidity as disproportionately low compared to the reality.
• An alternative approach, with more appropriate thresholds based on further analysis, could have had a meaningful and positive impact on transparency in EU markets—an outcome that should be fostered for the success of the SIU.