Response to IOSCO on regulatory issues raised by changes in market structure

The The Federation of European Securities Exchanges (FESE) response to the IOSCO Consultation Report on ‘Regulatory Issues Raised by Changes in Market Structure’.

FESE welcomes the IOSCO consultation and reaffirms its commitment to promoting transparent, efficient, and competitive financial markets. Representing 46 exchanges across Europe, FESE emphasizes the critical role that Regulated Markets (RMs) play in delivering neutral, open, and reliable price formation for both institutional and retail investors. In light of evolving market structures and ongoing regulatory reforms, particularly the MiFID II review, FESE supports efforts to modernize and harmonize the European trading landscape.

In our response, we cautions against regulatory measures that could unintentionally exacerbate market fragmentation. It highlights the risks of creating a two-tier market, where increased OTC trading may limit access to liquidity and hinder small and mid-sized companies. We stress the importance of maintaining high levels of trading on open, neutral, and transparent venues, which are essential for robust price discovery, best execution, and equitable access. Regulators must carefully assess the impact of non-transparent venues on market integrity and the real economy.