FIX EMEA 2020: How ESMA is keeping the industry on its toes

Published on 8 September 2020

Matt Coupe, Co-Chair of the EMEA Regional Committee in the FIX Trading Community outlines the regulatory changes that are hitting capital markets firms today, from the many consultations led by the European Securities and Markets Authority (ESMA), to the responses that firms need to consider as their business environment changes.

This year’s agenda at the virtual FIX EMEA Trading conference on 18 September 2020, includes:

Philippe Guillot, Managing Director, Markets Directorate, Autorité des marchés financiers (AMF)
Stephen Hanks, Markets Policy, FCA
Tilman Lueder, Head of Securities Markets, EU Commission
Paul Tang, MEP
Greg Yanco, Executive Director, Markets, Australian Securities & Investments Commission (ASIC)

Details of the event can be found here: FIX EMEA Trading Conference – Going Virtual, Going Global

Dan Barnes Welcome to Trader TV. I’m Dan Barnes. Joining me today is Matt Coupe, co-chair of FIX EMEA, to discuss some of the market structural and regulatory topics which are going to be discussed with the FIX EMEA Conference in September. Matt, welcome to Trader TV.

Matt Coupe Thanks Dan, thanks for having me.

Dan Barnes So what’s in play with ESMA and the European Commission at the moment?

Matt Coupe We’ve been pretty busy. We’ve got a lot of work in terms of consultation papers and there’s been a lot of questions asked around the industry. Most recently and most topically, ESMA have released a number of reports over the last week; we have a report on transparency and trading obligation for equities, we have a report on the systematic internalizer and its role in non-equities. We also have a report on non-equity transparency, but also we’ve got a time coming our way over the coming months. We’ve got SME growth markets, we’ve got algorithmic trading. We’ve got the role of organized trading facilities in the markets and also a final concentration paper on transaction reporting. All these consultation papers proposed to make changes to the regulation, changes to data, and changes then potentially to workflow, and then potentially even changes to how we trade and engage in the marketplace across all asset classes.

Dan Barnes Wow, no small feat?

Matt Coupe No, it’s not, and I think the key thing here is the industry needs to look for and discuss this, come together, look at the impact and the transactional workflow to then be able to understand that, make sure we apply appropriate data standards so we can implement it effectively, and then actually implement it as well with everything else that’s going on.

Dan Barnes And so do you see different priorities for the buy-side and sell-side in responding to these consultations?

Matt Coupe I think they are generally aligned. I think there are probably slightly different nuances to it. The sell-side are obviously taking the role of liquidity provider across all asset classes and also the execution services provider. And so they are very much focused on the micro-execution side of it and how the provision of liquidity might adjust. That’s not to say that the buy-side do not take these matters seriously either, because obviously, if that changes and they see execution quality slipping, that’s a key impact for them, and it’s not benefiting the end investor. But I think there does seem to be quite a big trend within buy-sides on; focusing on data, focusing on data quality, wanting to make sure that they can have appropriate analytics and performance analytics in place to prove to their clients that they’re trading effectively.

Dan Barnes At the FIX event we’ve got a strong bench of speakers, not just from Europe, but also from the US and Asia-Pacific. Could you give us some of the highlights of who’s going to be talking?

Matt Coupe So we have the leading policy makers within Europe, Australia and also hopefully in the US as well. We have leading buy-sides, sell-sides, technology vendors and also trading venues. We’re going to see a real variety of people. And I think this is a great thing about the FIX EMEA event is that it’s a noncommercial event, and what we strive to do is have the best people in the industry speaking, raising the questions and trying to engage in the debate about what we need to solve, what we need to fix and what we need to deliver.

Dan Barnes If I were an attendee at the event, what sort of answers do you think I should be looking for from this?

Matt Coupe Coming from my background, I’ve taken a number of different roles in the industry, working for a vendor trading venue and also for the sell-side, but naturally within any role I’ve taken, I think the key thing that people need to look at while attending conferences is what am I going to learn? How does this impact me in my role? if I made FinTech, I need to be thinking about what my clients are going to engage in and what the challenges that I need to overcome in the future, so I can future proof them in terms of what needs to happen. If I’m a trading venue, obviously, the key market structure debates are going to be critical and making sure that I can engage my clients in an effective way. Sell-side, the same thing happens to and also making sure that from a technology point of view, I can engage and make sure that with the buy-side as my partner, I can make sure that data flows appropriately and I’m future proofing what needs to evolve. And of course, as a buy-side, it’s about the education and understanding what’s going out there and being able to express your views, because the key thing about this event, it’s really also a proper virtual event enabling networking and engagement across the whole industry as well. So even if you’re not speaking on a panel, you get the ability to ask questions in the panel sessions and also bilaterally network with your peers as well.

Dan Barnes Matt, that’s been excellent, thank you very much.

Matt Coupe Thanks a lot Dan for having me.

Dan Barnes I’d like to thank Matt Coupe for his insights today and of course you for watching. To catch up on our other shows go to TraderTV.NET or ETFTV.NET, and I’ll see you at the FIX Conference in September.