The Futures Industry Association European Principal Traders Association (FIA EPTA), representing Europe’s leading Principal Trading Firms, has emphasised the urgent need for the EU to strengthen capital markets liquidity, to be more competitive and achieve its strategic objectives for a safer, greener, and more prosperous future. The association outlines its policy recommendations for 2024-29 under the title Tide of Change: Enhancing Liquidity Provision to the European Economy.
“The key question is how to ensure that European capital markets are attractive on a global scale, encouraging both local and international participants to engage more actively than they currently do,” Piebe Teeboom, Secretary General of FIA EPTA, tells TradingTech Insight. “From a data and technology perspective, we see inefficiencies in EU markets that need to be addressed, and our report offers suggestions to this end.”
The recommendations from FIA EPTA focus on three main areas to boost liquidity in EU capital markets, which is seen as vital for supporting economic security and growth. Firstly, the association calls for strengthening the EU single market for capital through enhanced supervisory convergence and more centralised supervision. Secondly, it proposes measures to enhance the attractiveness and global competitiveness of EU markets by establishing clear objectives centred on competitiveness, which would be supported by a framework of simplified regulation. Finally, FIA EPTA advocates for unlocking EU capital market liquidity by implementing targeted regulatory reforms. These reforms would focus on increasing market transparency and introducing more proportionate prudential rules to create a balanced regulatory environment.
“Our recommendation is to centralise supervisory reporting so that firms report to a single entity, such as ESMA, rather than multiple local supervisors,” says Teeboom. “This would create a central data hub, accessible to all local supervisors, offering a complete market overview. This approach would also align with other proposals in our report, addressing overlaps and gaps in the current reporting requirements, which have multiplied since the financial crisis. By creating a unified set of rules and definitions, we could simplify compliance, reduce redundancy, and enhance clarity for market participants.”
He continues: “We believe it is really important that EU policy makers gain a better understanding of what is actually happening—and not happening—in the markets, especially in areas where policymakers want to encourage activity. We believe it would be more effective if we start with a complete, EU-wide overview. We think that many of the challenges in European capital markets policy stem from the current fragmented approach, where each member state enters the discussion with a narrow, isolated view.”
FIA EPTA members have expressed their readiness to collaborate with EU policymakers to drive forward these initiatives, aiming to revitalise EU capital markets as a foundation for economic growth and security. The association’s manifesto reiterates a commitment to ensuring that EU capital markets effectively serve civil society’s needs while fostering a stable and competitive financial environment.
“As liquidity providers, market liquidity is naturally a key concern for us,” says Teeboom. “From a technology standpoint, one of the most compelling ways to improve market function is through greater transparency. We believe that increased transparency reduces search costs, fosters competition, and encourages innovation—both in terms of new products and by allowing new participants to enter the market.”
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