The battle lines have been drawn and the first volleys fired in the quickly escalating battle for trade volume in Europe.
Boston, MA, November 4, 2009 – A new report from Aite Group, LLC reviews the impact of multilateral trading facilities (MTFs) on Europe's exchange landscape. It also provides a situational profile of 17 major trading venues, and considers the potential impact of market consolidation and increasing regulation, as well as the influence of dark pools.
One-hundred years ago, there were 22 stock exchanges in Great Britain alone, though over time, only the biggest exchanges in Europe were left standing. Recent technology, combined with MiFID, has created an environment in which MTFs can once again challenge the major exchanges. Today, MTFs are growing in volume, while traditional exchanges continue to lose volume. Now, European regulatory bodies are considering making dark pools register as MTFs, which would expand MTFs share of volume even further.
"One of the major questions now being addressed by European regulatory bodies with regard to MTFs is whether the dark pools that are owned by brokers should be registered as MTFs," says Phillip Silitschanu, senior analyst with Aite Group and author of this report. "Brokers argue that registering dark pools this way would expose them to toxic order flow while hindering their ability to provide better pricing. Yet, if they do register as MTFs, the entire European MTF landscape could change dramatically."
The report reviews 17 trading venues: BATS, Burgundy, Chi-X, Euronext, Equiduct, LiquidNet, London Stock Exchange, NASDAQ, NYFIX, NYSE Arca Europe, PLUS Markets, ITG's POSIT, QUOTE MTF, SIX Swiss Exchange, Euro TLX, Turquoise, and XETRA.
This 25-page Impact Note contains 26 figures. Clients of Aite Group's Institutional Securities & Investments service can download the report.