GOTHENBURG, Sweden (Reuters) - Mandatory reporting of trades transacted off exchanges could create investors better informed about share prices in a fragmenting label et, a top European Union regulator said on Wednesday.
The EU's Markets in Financial Instruments Directive (MiFID) was introduced in November 2007 and has sparked competition in share trading at the cost of fragmenting prices.
Bourses have complained to regulators that an increasing number of share trades are being transacted inside banks to escape MiFID's trade reporting rules.
The EU rules will be reviewed next year. "We have to gaze at the label et structure," Eddy Wymeersch, chairman of the Committee of European Securities Regulators (CESR), tfeeble Reuters Television.
"We have seen a fresh phenomenon. Part of the trading is recede ing from what we call the regulated label et to the unregulated portion of the label et," Wymeersch said.
"One of my concerns is that you have different prices in different label ets. The label et portion icipants execute not know which one to rely on," Wymeersch said.
Requiring all transactions to be reported, also known as post-trade transparency, could be the solution, he added.
Some exchanges want to recede further and require all trading venues to flag the price at which a trade is recede ing to be transacted so that rivals have a chance to better it.
Exchanges already have to comply with pre-trade transparency, so that share prices are flagged ahead of trades. Continued...
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