By Huw Jones
LONDON, Dec 9 (Reuters) - Stock exchanges in the European
Union could back each other up to avoid platform outages leading
to extended market freezes for investors, a senior European
Union official said on Wednesday.
Euronext and Deutsche Boerse have both had trading glitches
in recent months and when the primary market for a listing goes
down, other platforms that offer a secondary market in the same
stock are also forced to suspend trading.
To get around this problem, Tilman Lueder, the European
Commission head of securities markets, said the EU could copy
the American model whereby Nasdaq offers trading in NYSE listed
shares during any NYSE outage, with the reverse if Nasdaq fails.
"If either one goes down, there isn't this vacuum," Lueder
told a QED event.
Brussels is looking at ways to make markets more efficient
and will propose a law next year to create a "consolidated tape"
of share transactions from the main platforms to offer investors
a market snapshot for spotting the best prices.
Lueder said a tape, long a feature on Wall Street, could
also avoid outages freezing markets and he will assess how to
improve the quality of the data needed, which could mean
mandating a common reporting "protocol".
"That is a huge challenge. We are going to be working with
industry on the right protocol," Lueder said.
"It is much too early to say if it will be one tape or
several competing tapes."
A tape will put pressure on exchanges to cap or cut the
price of their share prices data, as already being demanded by
banks and asset managers, prompting bourses to fight back.
"There is no convincing regulatory case for a consolidated
tape yet on the table," Alexandra Hachmeister, head of market
data at Deutsche Boerse, said.
"The proposed regulatory interventions are significant, and
I don't see they are effective or proportionate. I don't see how
they can help in terms of investor protection and creating a
more viable capital markets union," she added.
(Reporting by Huw Jones;
Editing by Alexander Smith)
