The World Federation of Exchanges (WFE), the global industry association for exchanges and clearing houses, has published a response to the European Commission’s (EC) consultation on the Savings and Investment Union (SIU). The WFE commends the simplification and burden reduction objectives, but urges the EC to shift its focus from structural supervision reforms towards more impactful, growth-oriented initiatives.

The WFE cautions that the creation of a single supervisory authority will not, in itself, generate economic growth or meaningfully attract investment to European capital markets.

Instead, the EC should prioritise:

• Tax Regime Reform: The introduction of tax-advantaged investment accounts is a strong start, but deeper reforms are essential. These include eliminating transaction taxes, reducing listing costs, and addressing the persistent debt-equity bias that discourages equity financing. Such changes would directly enhance investor participation and channel capital into productive sectors of the economy.
• Support for Investors: Empowering retail and institutional investors with access to risk management tools, such as regulated derivatives, and reducing paternalistic barriers to market entry are essential. A balanced approach to investor protection that includes financial literacy and experience – not just regulation – is vital for long-term financial resilience.
• Proportional, Principles-Based Regulation: The WFE continues to advocate for a shift from prescriptive, rules-based legislation to principles-based regulation that allows for a degree of divergence in how firms achieve compliance which would be a result of different and more innovative approaches to the same problem. Excessive regulatory burdens, such as those proposed under EMIR 3.0 and DORA, threaten to stifle innovation and delay much-needed advancements in post-trade infrastructure.
• Market-Led Consolidation: Any efforts to consolidate financial market infrastructure should be driven by market dynamics, not regulatory mandates, allowing efficiencies and synergies to emerge organically. Consolidation should enhance competitiveness, not undermine national expertise or create unnecessary supervisory overlaps.
• Bilateral Venues: A primary focus should be on ensuring that the internalisation of order flow is properly contributing to beneficial market dynamics. In particular, as liquidity is siphoned off exchanges, which are open to all market participants who wish to trade, into bilateral trading venues, the Commission should consider how this affects liquidity and best execution. This is not just important for investors, but it impacts market quality criteria that issuers consider before listing.

Nandini Sukumar, CEO of the WFE, said, “We welcome the ambition of the Savings and Investment Union; and call for ambition to be aligned with economic reality. Real growth will come from removing barriers and giving investors the tools, incentives, and confidence to participate fully in European markets. The Single Supervisory Mechanism for banks is not something to emulate, such centralisation has not propelled EU banks into global leadership positions by market capitalisation. The EU should focus on actionable, high-impact areas such as tax incentives and investor empowerment to further growth.”

Richard Metcalfe, Head of Regulatory Affairs at the WFE, said, “We are increasingly concerned about the growing trend toward internalisation of order flow in Europe. The U.S. experience demonstrates that internalisation fragments markets and undermines price discovery – exactly what the EU is trying to prevent. Exchanges provide transparent, lit markets with equal access and robust investor protections. These essential benefits, and the clear distinction from opaque bilateral trading, must be recognised and preserved.”

Read the full response here.

Source: WFE

BETTER FINANCE Asks EU Member States to be More Ambitious with Their European Savings Label Initiative

BETTER FINANCE, the voice of European savers and individual investors, expresses hopes but also concerns regarding the European Savings Label initiative to be launched today by a group of EU Member States under the “Finance Europe” banner. 

Despite its stated and excellent objective to enhance European competitiveness and channel private savings into productive investment, the initiative demonstrates a worrying disregard for the very citizens it purports to serve. 

The programme of the launch event, disclosed at the last minute, strikingly excludes any participation from organisations representing European savers and individual investors. In contrast, the agenda features extensive representation from financial industry leaders and trade associations, many of whom were reportedly consulted during the preparatory phase. BETTER FINANCE, however, was not consulted or invited to contribute to the project’s design or public discussion. 

“The absence of EU saver and investor representation at this critical moment is both telling and troubling,” said Guillaume Prache, Founder and Senior Adviser of BETTER FINANCE. “Europe’s households are by far the main source of long-term capital, yet their interests are nowhere to be seen in this initiative.” 

While BETTER FINANCE acknowledges that the joint effort by Member States to promote cross-border savings tools marks a step in the right direction, the initiative lacks the ambition needed to address the severe fragmentation of the EU “retail” investment market. The label, as currently envisioned, is a “Plan B” compared to more impactful solutions such as a simplified, consumer-centric Pan-European Personal Pension Product (PEPP), long championed by BETTER FINANCE. 

Crucially, the initiative diverges from one core priority set out in both the Letta Report and the European Commission’s own Action Plan for a Savings and Investments Union (SIU), which both rightly place improving returns for individual investors at the heart of the “Savings & Investments Union” policy initiative. 

Furthermore, the initiative fails to address one of the most pressing structural issues in EU retail finance: the scale problem. Market fragmentation, driven by national-level non-tariff barriers, remains a key obstacle to creating a genuine Single Market for savings and investments. By offering yet another label to purely national savings products without tackling these barriers, the initiative risks becoming another missed opportunity. 

BETTER FINANCE calls on EU policymakers to prioritise the interests of European citizens as individual investors and to ensure they are not only included in, but also central to, the design and governance of any initiative affecting their savings.

Source: BETTER FINANCE