Call For More Transparency in Trading of Financial Instruments

S&D Euro MPs today backed proposals to make the trading of financial instruments fairer and more transparent. A report adopted today in Strasbourg sets out the views of the European Parliament on a forthcoming revision of the so-called Market in Financial Instruments Directive.

S&D Euro MPs raised concerns, however, about a consultation on the issue launched last week by the European Commission.

S&D negotiator Arlene McCarthy has written to European Commissioner Michel Barnier setting out these concerns. She said: “Whilst there is much to welcome in the Commission’s proposal with regard to non-equity transparency, commodity markets, market data, small- and medium-sized enterprises and investor protection, I am concerned about the way this consultation paper deals with poorly regulated, over-the-counter trading of equities.

“The Parliament’s report calls for a fundamental review of over-the-counter trading, and of broker crossing networks, which are used by investment banks to trade equities without being subject to important regulations on transparency and market conduct.

“Euro MPs have made clear that the level of OTC trading is too high, and tough enforcement is required to reduce it and strengthen transparency in European markets.

“We need to shed more light on the dark side of financial markets.”

Said S&D spokesman on economic and monetary affairs Udo Bullmann: “Regulators need to have the right tools to understand what is going on in the markets.

“We want the capital markets to do the job they were meant to do, which is to work for the real economy.”