The FIX Trading Community has called on the European Securities and Markets Authority to change European post-trade reporting rules, warning that duplicate and technical reports are preventing investors from accurately measuring the size and liquidity of the region’s equity market.
The industry association submitted its recommendations in response to ESMA’s Call for Evidence on the market structure of European equity markets, which closed on June 30. FIX said current trade flags do not allow data users to distinguish transactions that contribute to price formation from duplicate reports, internal risk transfers and other events that do not represent new economic activity.
The problem extends beyond regulatory compliance. Reported trading volumes influence how investors assess liquidity, compare European markets with the United States and Asia, select execution venues and determine whether large orders can be completed without moving prices. If the same transaction is reported several times or technical transfers are counted as market activity, the resulting data can misrepresent where liquidity is available and how much genuine investor interest exists.
FIX Executive Director Jim Kaye said the problems make the overall size of the European market impossible to measure accurately and complicate trend analysis across trading sessions, special trading days and other market events.
“The way trades are flagged currently mean investors can’t separate price-forming transactions from duplicate or technical reporting, and so are dramatically under-estimating European market size and liquidity,” Kaye said. “Clarifications to RTS 1 to enable accurate market volume calculations can be enacted quicky and easily, positioning European markets as transparent, efficient, and attractive to global capital.”
One Trade Can Appear Several Times
RTS 1 sets out transparency requirements for shares, exchange-traded funds and other equity-like instruments under the Markets in Financial Instruments Regulation. It determines which transactions must be disclosed, when publication can be deferred and which flags should be attached to reported trades.
FIX argues that the framework does not always identify the economic purpose of a transaction clearly enough. A transfer between two entities in the same corporate group may be conducted for risk management rather than to express a new investment decision. A transaction involving a chain of intermediaries may also generate several reports even though only one underlying trade took place.
Cross-border activity creates another source of duplication. Following the United Kingdom’s departure from the European Union, firms can face overlapping UK and EU transparency obligations. A trade involving entities subject to both regimes can consequently appear in more than one public data set.
FIX wants the EU to recognize the United Kingdom’s RTS 1 post-trade transparency regime as equivalent for these purposes. The association said this would prevent transactions already reported under UK rules from being published again under the EU framework.
The group also recommended that ESMA clarify the treatment of counterparty chains and off-book cross-border transactions. Similar concerns were raised during the UK Financial Conduct Authority’s review of its equity-market rules, where respondents identified overlapping cross-border obligations as a cause of repeated trade reports.
Unless those reports can be connected or suppressed, market-data users may count several operational records as several separate trades. The apparent volume rises, but no additional liquidity has been created.
FIX Wants Technical Transfers Removed From Market Volumes
FIX recommended extending exemptions from post-trade transparency requirements to cover more non-price-forming events. It also wants intra-group risk-management transactions excluded when they do not represent a change in beneficial ownership or new market interest.
This distinction matters because market volume is generally used as a proxy for liquidity. A high reported volume should indicate that buyers and sellers can transact in size. Technical transfers, duplicate reports and internal movements do not necessarily provide liquidity that another investor can access.
FIX’s response therefore separates price formation from accessibility. Price-forming transactions contain genuine economic interest and can contribute information to the market price. Accessible liquidity refers to trading opportunities that are available and suitable for a particular client at a particular time.
Liquidity displayed in a public order book may be immediately accessible to an automated trading system. A negotiated block trade, closing-price transaction or bilateral institutional trade may be available only to certain counterparties, subject to size, timing or relationship requirements. Both can represent legitimate activity, but they should not automatically be treated as interchangeable.
ESMA raised the same issue in its consultation. The regulator said lit continuous trading declined between 2022 and 2025, while closing auctions, frequent batch auctions and systematic internaliser trading gained activity. It asked market participants how liquidity should be assessed across mechanisms that differ in their ability to form prices and in who can access them.
ETF Transactions Can Produce Three Reports
FIX also called for changes to the reporting of ETF transactions conducted at net asset value. Under the current EU approach, different stages of an ETF NAV transaction can result in three reports. FIX wants that requirement reduced to one report, bringing the EU closer to the FCA’s treatment of such transactions.
Related
ETF trades priced at NAV differ from ordinary exchange transactions because the final price is based on the calculated value of the underlying portfolio rather than the market price available when the order is arranged. Reporting several stages of the process can create records that appear to represent separate transactions even when they relate to the same economic event.
The association argues that a single report would preserve transparency while reducing the operational burden on firms and making consolidated data easier to interpret.
The FCA previously concluded that special treatment was appropriate for ETF transactions executed at NAV. During its review of UK equity-market rules, the regulator found that 98% of ETF trades and 46% of ETF volume were being reported in real time. It estimated that introducing a NAV deferral would reduce immediate reporting by 0.7% of trades and 2.7% of volume.
The figures indicate that targeted changes can address specific transaction types without removing most ETF activity from public view.
Closing Auctions Need a Separate Flag
FIX wants ESMA to expand the definition of benchmark trades to include transactions conducted at a market’s official closing price. It also proposed adopting the CLSE flag already introduced by the FCA.
Closing auctions have become a larger part of European equity trading because index funds, exchange-traded funds and institutional portfolios often need to execute at the official end-of-day price. These transactions can account for substantial volume, particularly during index rebalances, derivatives expirations and the final trading days of reporting periods.
Without a dedicated flag, users cannot easily separate orders executed through the closing auction from bilateral transactions agreed at the closing price after it has been established. Both may reference the same benchmark, but only the auction orders contribute directly to the process that determines the official close.
The FCA expanded its benchmark-trade definition to include transactions at market closing prices and introduced CLSE to identify them. FIX argues that adopting a similar approach in the EU would provide a clearer picture of closing-price activity and make UK and European data easier to compare.
Bad Input Data Could Weaken Europe’s Consolidated Tape
The reporting dispute has become more important as the EU prepares its first consolidated tape for shares and ETFs. ESMA selected EuroCTP in December 2025 as the applicant considered most suitable to operate the service, subject to authorization.
The tape is intended to combine trading information from fragmented European venues into a single data stream. It should give investors a broader view of prices and transactions across the EU, addressing a long-standing difference between Europe and the United States, where consolidated equity data has existed for decades.
A consolidated tape, however, cannot correct every weakness in the information submitted to it. If source reports contain duplicates, inconsistent flags or technical transactions presented as market trades, consolidating them could distribute the distortion more efficiently rather than eliminate it.
Accurate classifications will also affect how the tape calculates market shares, distributes data revenue and helps investors compare execution across venues. The reporting rules therefore influence both the quality of the tape and the conclusions firms draw from it.
ESMA Will Respond in the Second Half of 2026
ESMA launched its market-structure review after observing changes in where and how European equities trade. In addition to addressable liquidity and post-trade flags, the consultation examined closing auctions, periodic auctions, systematic internalisers and the decline in continuous lit trading.
The regulator plans to issue a feedback statement during the second half of 2026. That process could determine whether the changes proposed by FIX lead to amendments to RTS 1, regulatory guidance or further technical work.
FIX said its recommendations rely largely on established practices and could be implemented without redesigning Europe’s market structure. The association also offered to provide technical support.
“These modifications are essential for European market development and efficiency,” Kaye said. “They align with established practices, we believe will be relatively straightforward to implement, and FIX is ready and willing to assist with technical support.”
The proposals appear technical, but the underlying issue is fundamental. Europe is developing a consolidated tape and attempting to attract more global investment while market participants still disagree over which reported transactions represent real, accessible liquidity. Until the reporting framework separates economic trades from operational records consistently, investors may continue to lack a reliable answer to a basic question: how large and liquid is the European equity market?
