FESE has worked with other prominent European associations to harmonise the tick size regimes in Europe (which did stand at approximately 25 across the EU) in the interest of achieving benefits to the markets, users and investors by simplifying the complexity and number of regimes in place.
From the perspective of each trading venue, excessively granular tick sizes in securities can have a detrimental effect on market depth (i.e. to liquidity) and could lead to significantly increased costs for the many users of each exchange throughout the value chain; and have spillover costs for the derivatives exchanges’ clients.
With these considerations in mind, those involved agreed on a number of potential tick size regimes and FESE launched a Pan-European initiative to collect the views of market participants regarding the possibility to reduce the number of tick size regimes across EU equity markets.
Based on the results of this consultation, participants committed to:
- Harmonising the tick size regimes for the most liquid stocks;
- Reducing the number of regimes in place to the maximum extent possible ;
- Simplifying the bands; and
- Implementing the changes, together with the users within a range of 2 weeks to 6 months, depending on the needs of the user banks.
Please click here to view the document which summarises the tables’ implementation dates by markets.