By Huw Jones
LONDON (Reuters) - Cboe Global Markets said on Tuesday it has launched a tariff program to attract retail brokers, as bourses, asset managers and banks urge the European Union to improve retail access to the bloc's capital market to catch up with Wall Street.
The exchange operator said it launched the tariff program last Friday.
Retail investors make up about 14% of on-exchange share trading in Europe, compared with roughly triple this in the United States, Natan Tiefenbrun, president of North American and European equities at Chicago-based Cboe, told reporters.
An EU ban from June 2026 on payment for order flow, or where exchanges pay brokers who direct retail orders to them, is forcing a rethink in business models, Tiefenbrun said. The ban is part of EU efforts to attract more retail investors to deepen capital markets.
"There's all of these supportive catalysts, tailwinds around retail participation," Tiefenbrun said.
European exchanges industry body FESE, its counterpart for asset managers, EFAMA, and the European Banking Federation said in a joint report on Tuesday that more needs to be done to improve retail investors' access to products, and improve financial literacy to foster an investment culture.
"European capital markets are losing their competitiveness, particularly when compared to the United States," the report said, adding there is a need to overcome "risk aversion" of retail investors.
To also help attract retail investors, Tiefenbrun said Cboe hopes to obtain regulatory approval by year-end for company listings in Britain and the EU, pitting itself against rivals such as LSEG, Deutsche Boerse (ETR:DB1Gn) and Euronext.
"We know that the European market for corporate listings has been challenged of late, and we know European issuers, large and small, have been favouring U.S. listings, but they don't really want to uproot their management team and move everyone to the U.S.," Tiefenbrun said.
Energy or resources companies could, for example, list locally on Cboe in Europe or Australia, and have a "simple path" to a second listing to get wider exposure via Cboe in the United States, he said.