More data will become available to assess this issue more rigorously. I do not, however, expect this overall conclusion to change in the light of fuller information. A range of views were expressed about the regime during the consultation. The WPA regime received strong support from broker dealers and large customers active in these trades and opposition from broker dealers who mainly trade as agents, from a competing exchange and from a smaller institution. The consultation also provided some interesting qualitative information about how WPAs operate in practice.
New issues raised by consultees include interaction with SETS and competition between exchanges.
I will consider each aspect in turn. I consider that the WPA rules do distort competition between intermediaries in a similar way to delayed publication regimes - that is, through giving the broker dealers involved a significant information advantage over other market participants. The information contained in a WPA is likely to be similar in value or only slightly less valuable than that of a large trade under delayed publication. It is well established in the academic literature that large trades contain valuable information. The evidence on the delay between agreement and execution indicates that this information is concealed from the rest of the market for some time.