The European Securities Brokers Association (ESBA) is an industry association that promotes the provision of efficient, reliable and transparent market access for retail clients investing in the European Union (EU). ESBA’s Automated Quoting System (AQS) was designed with the intent of removing discrepancies between brokers and customers by creating a more level playing field.
AQS is a web-based system for securities brokers to create, retrieve, and process quotes for their customers at a specific point in time. It allows brokers to generate both limit and market orders of securities, thus allowing quick access to liquidity during times of volatility. Through the system, brokers can view up-to-date market information and determine the most attractive prices for the customer. Additionally, a broker might customize the system to meet the customer’s individual needs.
To ensure a fair, transparent process in the EU, ESBA has implemented a number of measures to regulate the use of the AQS. The AQS contains modules that allow customers to monitor and evaluate trading activities. For example, each trading activity is monitored by the AQS and customers are given an option to be alerted if the trading exceeds a certain level or if certain market conditions are present. The AQS also provides customers with a complete audit trail for each market information inquiry and trade that is made.
Furthermore, ESBA has established a number of rules to ensure the safety of customer funds by managing its own depositaries, banks and custodians throughout the European Union. Banks used by the AQS must comply with relevant EU law and be adequately regulated. ESBA also has notification procedures set in place for customers in case of suspected fraud or malfeasance.
In addition, ESBA has taken steps to ensure customer privacy and data protection. All data entered into the AQS is encrypted and maintained in a secure environment. The system is also monitored by an independent third-party to ensure that customer data is stored properly and is not leaked or used improperly.
By utilizing the AQS, European brokers are able to provide reliable, fast and secure access to liquidity to their clients. As the AQS is designed to provide the most efficient and transparent market access, it allows brokers to focus on providing their clients with the best possible service. The system ensures that the EU remains competitive in a global market and gives customers the ability to remain informed and secure when investing.
