Introductory remarks by Commissioner Albuquerque at the European Principal Traders Association (EPTA) Board meeting

European Principal Traders Association (EPTA) Board meeting

Good afternoon, ladies and gentlemen.

Firstly, I would like to thank EPTA for organising this event and bringing us together today. I try to split my time as best I can between the office and engaging directly with industry, so I am delighted to be able to sit down today for this discussion.

I attach great value to moments like these. The work underway at EU level to improve our capital markets delves deep into the details of our financial infrastructure, while also requiring us to keep a broader perspective.

Within the Commission, and I hope this is clear from our many communications on the topic, our vision for Europe's capital markets is one of further integration, in order to build depth and, importantly, liquidity. As principal traders, you provide a critical source of liquidity on which markets and end users rely.

Let me give you some context on how the work of the Savings and Investments Union impacts you as principal traders.

The mindset of this Commission is a pro-growth programme. This is the vision that is behind the Savings and Investments Union – we want a more integrated and frictionless capital market in Europe, where capital can flow faster and easier throughout the Union.

The SIU will bring about a virtuous circle whereby investments in capital markets – including by citizens – can be made more accessible, which in turn fuels our European companies and innovative capacity.

This is a nice visual representation with a beginning, the investor, and the end, the European company. But to get there, the circle itself only works if what connects them – our capital markets –function better.

The Market Integration and Supervision Package is critical here – it goes deep into the plumbing of our financial infrastructure and identifies where we could be doing things differently, and better.

It aims at removing the barriers that stand in the way of the creation of large liquidity pools, seamlessly accessible across Member States to finance productive opportunities.

I know that EPTA has been vocal in pushing for a genuine Single Rulebook and stronger supervisory convergence, and I believe that our package directly addresses the fragmentation that you have rightly highlighted.

I also agree with you on the need for robust market transparency. Enhancing the consolidated tape and moving key requirements from MiFID to MiFIR will help reveal True liquidity and facilitate the open competition that your members rely on.

This package will also create a ‘Pan-European Market Operator' status to allow the operation of several trading venues under a single license, and we are removing intra-group arrangement barriers to reduce administrative burdens.

When it comes to post-trade, it was identified that operational complexity in EU settlement costs the industry around 1 billion euro every year.

To fix this, we are enabling True freedom of issuance in the Central Securities Depositories Regulation, encouraging the use of T2S, and promoting a hub and spoke model to interconnect CSDs. We are also converting the Settlement Finality Directive into a Regulation for maximum harmonisation.

In all, the SIU, and in particular the Market Integration and Supervision Package, is about removing the barriers that prevent us from achieving genuine scale, and from fully realising Europe's economic and industrial potential.

Furthermore, later this year, we will also come up with an analysis of banking competitiveness. Our report will contain a comprehensive and holistic overview of what prevents banks from scaling within the Single Market. It will look at whether our framework can be simplified and made more effective. And it will also assess whether we have the foundations of the banking market for the future.

As you may have seen from the consultation we released a few weeks ago, we are also looking at investments firms' role in capital markets. And we will draw the necessary conclusions of these analyses.

In this rapidly changing global context, one we have all had to navigate in recent years, I believe we have a duty to our citizens to be ambitious in driving our financial services reform agenda, and more broadly in how Europe acts, reacts, and leads from a position of strength.

Before I conclude I want to make it clear that achieving our potential and ensuring that the SIU brings positive change also includes an important role for market participants – for all of you here today.

This ambition must be a collective effort. If you believe we are not yet reaching the level we should, then I want you to make your voice heard.

I am here today to listen, but your engagement, with me and with all stakeholders involved in bringing the SIU to life is crucial.

Thank you, and I am now looking forward to our discussion.