The European securities industry is suffering as national regulators look to secure local interests, according to Mark Howarth and Hirander Misra, Interim CEO and COO with multilateral trading facility Chi-X.

"We're seeing an increasing degree of protectionism on the continent, especially from the local regulators, notably, in France and Germany," says Misra. Given that competition has been good for the market, what we don't want to do is go back to the dark old days of concentration rules, so it's important as an industry that we all collaborate to make sure that doesn't happen."

Howarth agrees, noting that some regulators have resisted the temptation to indulge in protectionism. “There is a clear spectrum in Europe, from the UK Financial Services Authority, who have been very good and positive, through to the French and Germans who are clearly briefing behind the scenes to get their regulators onside with their national bourses, through to the Spanish who have maintained a form of concentration rule which is against at least the spirit of MiFID.”

He adds that the Spanish regulators are in clear breach of European Union policy. “The MiFID rules are unambiguous. In theory one could prosecute the Spanish exchange for anti-competitive practices but the process would take about three years and you’d need an extremely large chequebook, which begs the question is it worth it? In our view, it should really be the Spanish domestic institutions pushing for change in their market place to benefit their investors and pension holders.”

By John Beck, European Reporter for Waters