ESMA April Study Prompts Europe's 6 Finance Ministries to Propose Off-Exchange Trading Limits

According to the Association for Financial Markets in Europe (AFME), the European Securities and Markets Authority published a study in April raising concerns that declining exchange-based equity trading could weaken public price formation. Finance ministries from Europe's six largest economies have since proposed steps to limit off-exchange trading growth, including stricter transparency requirements and restrictions on handling retail orders outside public exchanges unless better prices are guaranteed.

AFME, representing banks including Deutsche Bank, Credit Agricole, and Santander, as well as trading firms Citadel Securities and Jane Street, warned that tighter rules could reduce liquidity and investor choice. Peter Tomlinson, head of equities trading at AFME, said: "Adding more rules or restricting how and where investors trade is unlikely to support goals of making markets more globally competitive."