U.S. Equities Market in Transition: Looking for Liquidity in All the Wrong Places?

Report Summary

U.S. Equities Market in Transition: Looking for Liquidity in All the Wrong Places?

Despite a dramatic increase in competition, Aite Group expects the NYSE Group and NASDAQ will hold onto their dominance in the U.S. equities market with a combined market share of close to 70% by 2010. However, increased market share will be won by aggres

Sang Lee
Co-Founder and Managing Partner

Boston, MA, August 14, 2006 – According to a new report, Aite Group expects fierce competition for market share in the U.S. equities market over the next three to four years. During the process, some contenders will go out of business, unable to secure any reasonable level of liquidity, while others will be acquired by larger players to remain competitive.

This report traces the evolution of the U.S. equities market, starting with the adoption of the Securities and Exchange Commission's Order Handling Rules, a set of rules designed to provide investors with greater limit order protection and access to market information, in 1997. The report also gives a detailed analysis of the structural and regulatory forces that have shaped today's market changes and predicts the future of U.S. equities for the next 5 years.

According to Sang Lee, Managing Partner of Aite Group and the author of the report, "While on the surface, fragmentation appears to have spread in the U.S. equities market, the harsh reality is that the market is still dominated by the NYSE Group and NASDAQ, who combined account for close to 80% of the market. Buoyed by broker support and aggressive pricing strategies, we expect to see increased market share for some of the regional exchanges and ATSs over the next five years."

This is a 56-page Impact Report. Clients of Aite Group's Institutional Securities and Wealth Management services can download the report.

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