The European Banking Federation has responded to the European Securities and Markets Authority’s call for evidence on the structure of European equity markets, arguing that Europe’s secondary markets are best served by a trading landscape that lets investors access liquidity across multiple venues and channels. In the context of the policy debate on the Market Infrastructure and Supervision Package, it supports targeted improvements, particularly to the Consolidated Tape regime, rather than major changes to the current equity market structure. The response recognizes the central role of primary trading venues, especially central limit order books, and broadly agrees with ESMA’s observations on trading trends, including a shift in on-book activity from lit continuous order books toward closing auctions and frequent batch auctions. It also stresses the role of Systematic Internalisers as bilateral, at-own-risk liquidity providers using their balance sheets to meet client execution needs, and argues that their growth reflects market developments such as rising costs and changing execution patterns rather than a regulatory failure. Any internalized activity that falls outside the scope of proper systematic internalisation should be dealt with through enforcement of the existing framework, not new legislation. The federation also acknowledges that excessive fragmentation can raise connectivity, market data, trading and surveillance costs, particularly for smaller and medium-sized intermediaries that must connect to multiple liquidity pools to meet best execution obligations. It presents the forthcoming Consolidated Tape as a key tool to improve transparency and give participants a fuller view of trading activity, while maintaining that any broader market structure changes should be supported by stronger evidence, including on whether price formation has worsened and whether secondary market structure is affecting the attractiveness of European Union listing markets.
European Banking Federation2026-07-07
European Banking Federation responds to ESMA call for evidence by backing targeted equity market reforms over structural overhaul
The European Banking Federation told ESMA that European equity markets should remain based on investor choice across multiple trading venues and liquidity channels. It backed improvements to the Consolidated Tape, especially on pre-trade transparency, rather than radical market structure changes. The federation also said concerns around improper internalization should be addressed through enforcement of existing rules, not new legislation.