As stated by the European Commission, the priorities for the MiFID/R review are "to improve transparency and availability of market data, improve the level-playing field between execution venues, and ensure that EU market infrastructures can remain competitive at international level”. To achieve this, there must be a diverse and sound trading landscape, enabling investors to select between various execution venues and market models in an environment where price formation and market integrity are protected. In the new macroeconomic normal, dominated by inflation and high interest rates, the need for strong market-based financing versus increasingly constrained bank-based financing is paramount. To achieve this, we need an investment and trading environment that can be trusted by all market participants, enables an efficient allocation of capital via robust price formation and provides open and fair competition for all participants.
European stock exchanges have invested significant resources to play their major role in financing the real economy and in fostering listing and SME financing. They support European countries in building robust financial markets, promoting strong financial industries and attracting international investments to truly service local economies. Exchanges are the venue of reference for price formation and price improvement, even more significantly when volatility hits the markets. Thank to their continuous investments and innovation, stock exchanges support fair and orderly trading to benefit of the whole ecosystem. They have been able to adapt and innovate to meet the needs of their various clients, from issuers to final investors and to the broader economy as a whole.
Euronext remains strongly committed to building the backbone of the Capital Markets Union. This is why we believe it is of paramount importance to ensure that the MiFID/R Review reinforces the competitiveness of EU markets. The outcome of the MiFID/R Review in this respect will define whether the EU has an ambition to be a continent of finance-makers, or accepts to be merely a territory of finance-takers. There are three key issues at the heart of the Review that require particular scrutiny: the establishment of a Consolidated Tape (CT) that brings true value to market participants; a ban on Payment for Order Flow (PFOF) to ensure retail investors get the best services by preventing conflicts of interest, and better balancing of lit and dark trading, meaning that Systematic Internalisers (SIs) are placed under proper regulatory oversight.