FIA EPTA members are supportive of the work being done by ESMA on market outages, particularly efforts to require trading venues to publish clear comprehensive outages plans on an ex-ante basis. Market resilience is at the core of efficient and competitive financial markets and it is imperative that trading venues clearly outline a well-planned approach to communication and management in the event of a market outage to provide certainty to market participants. The relevance for addressing these issues was clearly illustrated by outages experienced by two major exchange groups in November 2022, which once again highlighted the importance of the closing auction and proper trading venue communication.
FIA EPTA members believe trading venues should be required to:
- Adopt a clear programme of regular and informative communication during an outage;
- Clearly outline in an outages playbook how orders will be managed prior to market resumption;
- Prioritise operation of a closing auction and printing a closing price;
- Publish a consistent, pre-determined methodology for establishing a closing price as a substitute for when a closing auction cannot proceed ;
- Implement efficient and robust governance structures for managing outages, with effective and immediate standby capabilities encouraged as best practice; and
- Make post-mortems of any market outage public to market participants.
