FRANKFURT (Reuters) - A European Parliament’s plan to introduce sweeping reforms of securities markets will have a negative impact on Frankfurt bourse operator Deutsche Boerse, a senior company executive told Reuters on Wednesday.
Deutsche Boerse is particularly worried about the European lawmakers’ plan to slow down high-speed trading by half a second.
“As a result of that (plan) the liquidity will drop, the spreads will rise, with corresponding additional costs for investors and the real economy,” Market Policy head Stefan Mai told Reuters.
The parliament’s economic affairs committee on Wednesday voted 45 to zero to update an EU law known as Mifid, which was instrumental in ending national stock exchange monopolies.
Under the proposed law, share orders would have to be posted for at least half a second, far longer than high-frequency trading (HFT) firms currently stay in the market.
The plan to slow down high-speed trading by half a second is an effort to dampen the kind of financial speculation blamed for the stock market’s “flash crash” in May 2010.
Reporting By Andreas Kroener; Writing by Marilyn Gerlach; Editing by Elaine Hardcastle