FESE response to the IOSCO consultation report on market outages

FESE agrees with the key findings in IOSCO’s consultation report. We believe the recommended good practices around outage and communication plans, the reopening of trading, the closing auction and alternative prices, and the post-outage plan are largely appropriate.

We would also like to thank IOSCO for acknowledging FESE’s frameworks for industry-wide standard protocols and highlighting that the EU enjoys a comprehensive regulatory framework on outages. Looking at the details of the IOSCO findings, it is clear that one particular approach will not work in all cases, especially given the differences between equities and derivatives venues. The report also states that, in some jurisdictions with multiple trading venues, alternative venues could be used should a market outage occur on one of the markets. However, in the fragmented European trading landscape, if the primary venue experiences an outage, it is unlikely that other venues which generally follow the prices formed on the primary would be able to continue offering trading.