The FIX Trading Community (FIX) has called on the European Commission to make the use of standardised trade‑reporting flags mandatory across the bloc, arguing that clearer post‑trade transparency (PTT) is crucial for European capital markets to become more attractive.
In its response to the Commission’s consultation on the consolidated tape and related transparency rules, the non‑profit standards body highlights research showing that 44.6 % of average daily equity volume is executed outside trading venues order books, mostly on a bilateral basis, yet existing reporting mechanisms do not allow market participants to determine precisely how much of that liquidity is genuinely addressable.
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“FIX Trading Community advocates for a number of regulatory amendments to the PTT framework in Europe, including the suppression of non‑informational, technical or cross‑border duplicative reporting events.” said Jim Kaye, executive director at FIX. He added: “This would include the removal of NPFT transactions related to clearing and settlement activities (such as SFT, collateral, novation and clearing) from the tape, as they do not have any real informational value for trading purposes.”
Among other changes, FIX is urging policymakers to re‑introduce an XBDT flag to avoid double‑counting of post‑Brexit cross‑border trades, require reporting firms to identify intra‑group risk transfers, and mandate use of the CLSE flag to capture closing‑price trades that are currently under‑reported by an estimated 20 %.
Kaye added: “We note that despite efforts to promote uniform application of industry‑led trade flags, inconsistent application remains an issue. We believe that a more uniform implementation across Europe will be better achievable through regulatory guidance, including on correct flagging, rather than voluntary guidance,”
FIX’s submission also proposes a new execution‑method flag to distinguish manual, automated and algorithmic trades executed off‑venue. According to the group, these refinements would give investors and regulators a truer picture of on‑ and off‑venue liquidity, reduce unnecessary data costs, and help position European markets as a more attractive destination for global capital.
According to FIX, similar points have been raised in the past with the FCA in the UK.
The Commission is expected to publish the result of its consultation and draft amendments to the PTT regime later this year.
