European bourses seek ways of reducing wild share price fluctuations

The Federation of European Stock Exchanges has used its conference in Lucerne to press for tighter rules on the release of sensitive market information.

European bourses are to issue new guidelines for regulators and antitrust officials on releasing share-sensitive news to minimise wild price swings.

“The euro has created such a merger and acquistions market that the issue of releasing sensitive information is becoming more and more urgent,” said Paul Arlmann, the secretary-general of FESE.

News from regulators about merger probes can create extreme moves in equity prices and sometimes prompts the temporary suspension of trade mid-session. FESE wants regulators and other watchdogs to make their announcements outside trading hours.

The organisation, which represents all the main European bourses, has also stepped up its campaign to persuade the United States Securities and Exchange Commission to allow US brokers to become remote members of European bourses.

It would mean that American investors would only have to go through one channel to trade in European shares rather than through an American intermediary.

“Remote members could deliver a much cheaper service to US investors,” said Arlmann.

FESE is also urging the European Commission to speed up efforts to implement the Financial Services Action Plan which aims to update the entire regulatory structure of the EU’s financial sector.

swissinfo with agencies