Neelie Kroes, European commissioner for competition policy, told delegates at a City & Financial/ICMA conference in Brussels yesterday that they should not stop a new pan-European equity trading platform owned by investment banks from accessing post-trade services.
The new bank-owned platform will be able to become up and running after Mifid – which is designed to create a single European market for financial services – comes into force in November next year.
Kroes said: “I am encouraged by the news that a group of banks is considering launching a new trading platform. We do not yet have details on that project, but I trust that, if need be, it will be able to seamlessly plug into the existing post-trade infrastructure on a non-discriminatory basis.”
She added: “The same applies for some other platform providers. This will be a clear test of the [competition] code in practice. As Competition Commissioner, I will watch it with great interest.”
In a direct challenge to European stock exchanges, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs Group, Merrill Lynch, Morgan Stanley and UBS last month announced that they will form a pan-European equity trading platform.
In a joint statement, the investment banks said: "Today, equity trading is concentrated on a number of domestic stock exchanges. We are responding to the Mifid legislation by creating an integrated pan-European trading platform where equities can be traded more cost effectively, obtaining significant liquidity with greater efficiency for each and every participant in the equity markets."
The new trading platform, which is still being constructed, would have its own management team independent of the financial institutions and would permit others to use the facility.