Towards a European market structure that works for all investors


An efficient market structure is a prerequisite for a successful Capital Markets Union (CMU). The EU needs a market architecture that funds the economy in the most inclusive and fairest way for all investors. European regulations like MiFID II/MiFIR provide some tools to support this vision.

However, whilst the CMU is striving to improve the funding of the economy and foster investment, capital markets still present significant challenges for issuers and investors:

  • Transparency can be improved;
  • Retail investors do not have access to most venues;
  • Conflicts of interest are not always well-managed;
  • Retail participation is limited.

One of the keys to overcoming these challenges is in the intrinsic nexus of market structure with issuers and investors. The EU needs a market architecture that works for everyone, provides efficient price formation, fair competition and interaction among market participants, and delivers best execution. Trading venues are well suited to deliver on all those aspects for two fundamental reasons. First, transparent markets with deep pools of liquidity are a crucial component of price formation and best execution, as well as an important contributor to market resilience. Second, trading venues efficiently balance greater investor participation with investor protection and confidence. Investors are treated in a non-discriminatory and transparent way and conflicts of interest are well-managed.

Trading venues should be promoted to strengthen the CMU, without denying the need for investors, professional and retail, to access different types of venues. Recent months have seen significant growth of retail participation in capital markets across the EU, while still at a level far below that observed in the US. This trend should be supported through adequate measures, whilst preserving investor protection and guaranteeing an efficient and competitive equity market structure.