Europe’s Periodic Auctions Under the Microscope

Periodic auction books have become one of the most divisive aspects of Europe’s post-MiFID II equities landscape – so much so that European regulators have undertaken a review of the venues with the regulation less than a year old. The onus clearly is on operators and users of the platforms to put a firm case forward for why these auctions exist. TABB’s Tim Cave looks at the four characteristics of periodic auctions on which regulators are focused – their level of pre-trade transparency, short auction duration, price determination within the best bid and offer price, and self-matching capabilities – summarizing ESMA’s concerns as well as the pros and cons of possible remedies.