[ I N D E P T H | R E G U L A T I O N ]
“ The balkanisation of liquidity story is definitely playing out now . I think that some of the market practitioners were hoping - naively or otherwise - that there wouldn ' t be so much divergence so quickly , but I think now that ship has sailed and we ' re definitely seeing that happen ,” said James Baugh , head of European market structure at Cowen . “ It ' s [ Europe ’ s MiFID II changes ] all part of that narrative to try to curtail the amount of business transacted on MTF darks , as well as , continuing to apply pressure on systematic internalisers to try and push more of that business to lit .”
The key objective of MiFID II was to move volumes back onto lit markets , introducing things like the double volume caps ( DVCs ) for dark trading to do so . However , much of this liquidity has since resurfaced on alternative trading mechanisms with limited pre-
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