Off-market trading is dangerous, undermines prices, says AEX chief

The increase in off-market trading in Dutch blue chip stocks is dangerous for investors and undermines price setting, the chairman of the Amsterdam stock exchange says in Monday’s Financieele Dagblad.

The volume of over-the-counter trades has doubled to around 40% compared with a few years ago, according to European figures.
‘As an investor, you do not know where you stand. In addition, over the counter sales have no central counter weight who offer protection if people do not meet their obligations,’ said Cees Vermaas. ‘The fall of Lehman brothers in 2008 shows us such a scenario can happen.’
Vermaas’ warning comes as European officials begin a major overhaul of the 2007 European financial market regulations, known as Mifid.
‘Mifid was supposed to stimulate competition between stock exchanges, not drive trade into invisible corners,’ he said. Over the counter trading is now largely ‘anonymous electronic trading’, he said. ‘Trading belongs in a central market place under European supervision.’