Natan Tiefenbrun, president, North American and European equities, Cboe Global Markets
Following a year of elections around the world, and the appointment of a new European Commission, “competitiveness” seems to be high on every policy maker’s agenda. So, 2025 will see more heated debate, and perhaps some real progress, towards the alignment and streamlining of regulation – in an attempt to remove barriers to growth and improve the efficiency of financial markets. But the existential argument will be about how to encourage that greater competitiveness – whether it can be driven by top-down by policy makers or would be better achieved through a competitive market dynamic which enables, innovation and user choice more broadly.
Listening to our customers has led us to innovations such as periodic auctions, securities financing transactions clearing, and VWAP trajectory crossing – all market-led solutions that deliver improved trading performance, better risk management and greater capital and operational efficiencies.
So, we hope that regulators and policy makers also listen to what the customers of financial markets need – real and open choice and competition in the provision of listing, trading, clearing, settlement and (with the introduction of a consolidated tape) market data. Europe cannot achieve competitiveness without embracing competition.
Leo Labeis, CEO, REGnosys
Next year will be a year of continued reporting challenges and subsequent growth of the RegTech industry – predicted to be worth $85 billion by 2032 – as financial firms look to technology to stay ahead of regulatory changes.
This year saw the implementation of version 3.2 of the CFTC Rewrite, Emir refit (both the European and UK versions), JSFA, MAS and ASIC. This has come with challenges from an implementation perspective, with the EU refit being particularly difficult for market participants and trade repositories.
However, these changes are broadly welcome as they will accelerate the pace of data harmonisation across jurisdictions. Next year will see a continuation of these reforms with Canada and Hong Kong scheduled in the next 12 months. Eyes are also on the US with the new administration’s potential to adopt a new regulatory agenda, and Europe with several consultations regarding Mifid and SFTR.
Matt Smith, chief executive officer, SteelEye
Changing administrations, especially to different parties, typically results in a change in regulatory approach. We have already seen suggestions that the new administration in the US will change its attitude to enforcement, with regulatory attorneys predicting that Trump’s SEC is likely to halt the ‘off-channel’ texting probe.
But while enforcement action might change, the regulatory rules are unlikely to. The sustained SEC crackdown on off-channel communications since 2021 has certainly put the wheels in motion for many firms to improve their e-comms record keeping programmes and this is unlikely to change.
So, while the intensity of the enforcement action may shift in the US in 2025, we don’t expect firms will reverse any of the initiatives they have put in motion.
Scott Charity, senior market intelligence specialist and regulatory affairs at Berenberg
Over the next year we will see many new regulations being implemented throughout Europe, including DORA. The EU and ESMA have published multiple consultation papers for the market which includes order and record keeping and transaction reporting. These are all part of the Mifid II and Mifir Review. The EU also has the new DPE reporting regime which will come into force next year. This follows on from the changes UK has already implemented in 2024. The change to the reporting regimes in the UK and EU is part of a process to clean up data which should help with the creation of the consolidated tapes both in the UK and EU.
From a trading landscape point of view, we should see the impact of the new dark books which have been adopted in Europe in 2024 and which will continue in 2025. This will show if the dark midpoint books are a good source of liquidity. As multiple exchanges adopt these changes for sourcing liquidity, impact, if any, to lit book may be observed.
New venue and trading liquidity sources should show a very eventful 2025.