Preserving execution choice and reducing market data costs will improve competition, transparency, and investor outcomes
Brussels, Belgium — MFA urged the European Securities and Markets Authority (ESMA) to preserve the diversity of ways investment managers can execute trades and address rising market data costs in a letter submitted today. The letter responds to ESMA’s call for evidence on the market structure of EU equity markets.
“Strong equity markets require reasonably priced market data and flexibility to choose execution tools that help managers deliver the best outcomes for investors,” said Jillien Flores, MFA Chief Advocacy Officer. “Restricting execution choice without clear evidence of harm would be a step backward for EU equity markets, raising costs, reducing innovation, and weakening efficiency. Reforms should focus on what will make EU capital markets stronger, including a comprehensive consolidated tape and market data prices that reflect the cost of producing and distributing that data.”
Restricting execution choice or pushing order flow toward any single trading method without clear evidence of harm would reduce competition, limit innovation, and increase costs for investors. Recent changes in EU equity trading reflect healthy competition across execution methods, not a breakdown in market quality. Investment managers access equity markets through a range of methods, including central limit order books (CLOBs), closing auctions, frequent batch auctions, and systematic internalisers, to pursue best execution for end-investors.
The letter also urges ESMA to address market data, connectivity, and licensing costs, which make it harder for investors to identify and access liquidity across EU equity markets. MFA argues that the current reasonable commercial basis standard has not prevented escalating market data costs. A comprehensive, reasonably priced EU equity consolidated tape would give investors a more complete view of where trading is occurring and help them access liquidity across venues and execution methods.
Read the full letter here.
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About the global alternative asset management industry
The global alternative asset management industry — including hedge funds, private credit funds, and hybrid funds — serves thousands of public and private pension funds, charitable endowments, foundations, and other global institutional investors. The industry provides portfolio diversification and risk-adjusted returns to help meet their funding obligations and return targets throughout the economic cycle.
About MFA
Managed Funds Association (MFA), based in Washington, D.C., New York City, Brussels, and London, represents the global alternative asset management industry. MFA’s mission is to advance the ability of alternative asset managers to raise capital, invest it, and generate returns for their beneficiaries. MFA advocates on behalf of its membership and convenes stakeholders to address global regulatory, operational, and business issues. MFA has more than 180 fund manager members, including traditional hedge funds, private credit funds, and hybrid funds, that employ a diverse set of investment strategies. Member firms help pension plans, university endowments, charitable foundations, and other institutional investors diversify their investments, manage risk, and generate attractive returns throughout the economic cycle.
