3.III.2.1 FESCO standards for ATSs and order internalising systems

FESCO acknowledged that ATSs and order internalising systems could deliver greater efficiencies and new trading opportunities,1 in particular bringing competition to a market that was mainly dominated by RMs. However, the approach for ATSs and order internalising systems across the EEA varied, including with respect to pre-trade transparency.2 FESCO noted there were potential regulatory issues. FESCO signaled, among other things, the potential of (1) a harmed level playing field with RMs, (2) market fragmentation, and (3) too limited pre-trade transparency (since ATSs and order internalising systems could lack pre-trade transparency).3 The FESCO standards were mainly of an observational nature. As a short-term solution, FESCO advised transparency requirements to reduce the impact of fragmentation, including adequate pre-trade (and post-trade) transparency standards for ATSs and order internalising systems. For the long-term, FESCO stated a more comprehensive review of the ISD would be required.4