FESE generally believes that most of the measures proposed by ESMA are reasonable and in line with market standards. We believe however that the results of this consultation are likely to have an impact on further regulation (e.g. MiFID II). Therefore we would like to empahsise the following points:
- All market makers should effectively participate to enhance market liquidity.
- The calibration of the programmes' criteria is essential but depends on the market structure, the market participants, and the asset's liquidity and should therfore be left as much as possible to the discretion of the trading venue.
- There should not be a narrow definition of market making.
- Market makers play a different role in smaller, regional and less liquid markets than in large and liquid markets.
- There are good examples of existing market making models in Europe that have evolved over the years in cooperation with local market participants and local competent authorities. These models are tailor-made for the peculiarities of the regional markets in question and should be taken into consideration by the ESMA guidelines as otherwise there would be serious implications for existing market structures. In our response we expand on this further.
