Date: 25th March 2021

Access to equity market data is essential for “retail” investors to make informed investment decisions. However, new research by BETTER FINANCE found that online equity market data published by the four largest EU equity markets in 2019 are de facto not or just partially accessible to non-professional users.

The European Securities and Markets Authority (ESMA) also noted that many equity markets fail to fully comply with the law, especially with regards to the timeliness (a maximum delay of 15 minutes) and format of the trade data provided. Transparent and consolidated trading venues are the foundation of efficient capital markets for individual investors, small- and medium-sized enterprises (SMEs) and the economy as a whole.

From a retail investors’ point of view, securities exchanges enable them to securely and rapidly sell or buy an asset at a fair price by connecting them with a very large and diversified pool of investors (liquidity) wishing to buy or sell an asset. This is called “price formation” and it results from the publicity of pre- and post-trade data in real-time, or as close as possible to real-time.

Securities exchanges (such as stock markets) went almost fully digital and can be accessed from anywhere around the world via their webpages. Unfortunately, the increasing fragmentation and reduction in trade data transparency have steered EU capital markets more towards “dark pools”, where the essential functions of trade transparency and price formation are hampered.

EU Authorities rightfully promote “a Capital Markets Union for people and businesses”. However, equity markets in Europe are far from being “unionised” and – more concerning – are less and less helping EU citizens as individual, non-professional investors and EU SMEs who need capital to grow, innovate and create jobs.