The Exchange was responding to the draft of the new ISD, published by the Commission today, which has over-turned at the eleventh hour the well-balanced working text that was the product of 18 months' extensive market consultation.
In its contributions to various Commission consultations, the Exchange has consistently focused on the need for Europe to develop competitive equity markets that bring down the costs of capital for EU issuers. In the context of the ISD, it has advocated competition for order flow by removing concentration rules which have historically provided artificial barriers to genuine competition.
The Exchange believes strongly that the benefits that will accrue from a single financial market in Europe will only be realised if exchanges are prepared to accept the challenge of competition.? London enjoys an open and flexible structure and this directive represents a backward step for financial markets across the EU.
Until now, there had been a broad consensus in the market against the imposition of pre-trade transparency on the grounds that this would be at best unnecessary and at worst totally unworkable.? This was reflected in the Commission's working document, which set out to manage the potential risks associated with competition through conduct of business rules rather than pre-trade transparency requirements.
Commenting on the new text, Don Cruickshank, Chairman of the London Stock Exchange, said: "What is now on the table is an impractical and anti-competitive solution that risks driving business away from the EU.
"If there are concerns from other European markets about the effects of competition, they would be better addressed by the introduction of proper conduct of business regimes in those particular member states.
"It is vital that we do not lose sight of the Lisbon agenda on productivity and competitiveness and the prospects of delivering it."
