The European Commission has published a preliminary study on the prices, costs and volumes of trading and post-trading of securities in the EU. The study was carried out by Oxera Consulting Ltd.
The purpose of the study, which will be repeated, is to enable the Commission to track the evolution of prices and costs with a view to better policy development.
Data was provided by intermediaries (fund managers, brokers and custodian banks) and providers of infrastructure services (trading venues, central counterparty clearing houses and central securities depositories).
The principal findings of the study are that:
- Volume determines prices. There tends to be a lot more domestic than cross-border activity, although most infrastructures do have many clients from abroad. Nevertheless these account for much less volume than domestic clients, and costs have been seen to be greater for cross-border transactions than for domestic ones.
- Costs are decreasing. Across financial centres, transaction unit trading costs have been decreasing since 2006, although to different extents for different types of transaction.
Internal Market and Services Commissioner Charlie McCreevy said:
"This study is significant because it helps us understand the evolution of end-to-end trading and post-trading prices, costs and volumes. While acknowledging the broad diversity in the financial centres covered, I particularly welcome the study's findings concerning the decreases in costs for trading and clearing and to some extent also for settlement services since 2006. This confirms the positive impact on competition of the Markets in Financial Instruments Directive and the Code of Conduct on clearing and settlement. I encourage market participants to continue supporting our efforts to improve transparency and carry out sound policies based on facts."
View Monitoring prices, costs and volumes of trading and post-trading services, 16 July 2009