The claim came as the AFME released research that it said
revealed the true size of the European OTC equity market is
less than half what is currently reported.
Following the financial crisis, regulators are taking steps
to force OTC trades on to exchanges in order to improve
transparency and remove counterparty risk.
In its report entitled The Nature and Scale of
OTC Equity Trading in Europe, the AFME said that OTC share
trading in Europe accounts for 16% of total trades and not 40%
as widely reported.
The discrepancy is due to the failure of MiFID's
reporting processes to differentiate between genuine and
technical trading leading to many trades being counted more
Christian Krohn, a managing director of Equities at
the Association for Financial Markets in Europe said: "MiFID
has transformed the European equity market landscape but the
current reporting requirements cause confusion and can result
in misleading claims, as our research shows. This is of concern
as it suggests that policy decisions are driven by
misinformation or misunderstanding."
"In light of the ongoing MiFID Review and
regulatory proposals around OTC trading, it is critical that
policy makers have a full and accurate understanding of the
nature and scale of the OTC market."
The organisation said that more "granular and
standardised" reporting requirements would address provide much
needed clarity on all OTC equity trades.