Retail investors kept from European equity market data – Better Finance

Rick Steves

Equity market data is essential for “retail” investors to make informed investment decisions, but its most recent research found data published by the four largest EU equity markets online “are either totally or partially de facto not accessible for non-professional users.

FX Industry Europe

Better Finance is making the case the Capital Markets Union is at risk on account of European retail investors having less and less access to equity market data.

The European NGO reminded the trading industry that equity market data is essential for “retail” investors to make informed investment decisions, but its most recent research found data published by the four largest EU equity markets online “are either totally or partially de facto not accessible for non-professional users.

CBOE Europe, Goldman Sachs, TP ICAP UKMTF, and Deutsche Bourse (XETRA) were the four largest equity markets in Europe in 2019, according to ESMA.

The European Union requires equity trading venues (Regulated Markets and Multilateral Trading Facilities) to publish pre- and post-trade data that is accessible and understandable for end-users, free of charge, in a format that can easily be read, used, copied, and understood by the average reader, and respecting a maximum delay of 15 minutes.

ESMA has found that many equity markets fail to fully comply with the law, especially with regards to the timeliness.

Research by Better Finance found a dramatic shift away from EU-based “lit” regulated equity trading venues to less transparent and less retail investor-friendly non-EU based players.

The four largest equity markets disclose pre- and post-trade data to non-paying non-professional users, but does it very poorly, the ONG argues, as it includes unintelligible jargon and is buried deep within their platforms, only accessible through a maze of clicks and redirections or downloads of “csv” tables.

Guillaume Prache, Managing Director of BETTER FINANCE, said: “As stated by the European Commission, EU households are the main source of long-term financing for the real economy. For the Capital Markets Union (CMU) to succeed, individual investors and savers should be at the heart of the project and have trust in capital markets.”

To end the discrimination of consumers as “retail equity investors”, Mr. Prache called for access to market data, access to Pan-European collective redress, best execution of “retail” trade orders and prevention of conflicts of interests such as those generated by the practice of “payments for order flows”.

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