Lawyers Warn of Transatlantic Rule Change Trouble Ahead, Financial News

by: Financial News

The article addresses the long-awaited rule change that is set to allow US investors direct access to European exchanges and trading platforms. The rule change is fraught with challenges, according to lawyers.

Rob Falkner is quoted as saying "Such reform is to be welcomed but the reason why I believe the cost savings touted may be overrated is that it will not eliminate the part of transaction costs constituted by local settlement and clearing. The cost savings will be limited to the commissions of the local exchange broker and many US investors already use the services of a global US broker-dealer that will have direct access to European exchanges through its European affiliates."

"US and European industry regulation may provide similar levels of investor protection, but I suspect there may need to be some work towards greater convergence in rule content before the regulatory bodies on each side of the Atlantic will be comfortable with adopting such proposals."