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– make it difficult to trade seamlessly across borders. While there has been progress toward harmonisation, more work is needed to create a truly unified market.
Further, European markets consistently trade at a valuation discount to the US, partly due to lower household investor participation and perceptions of thinner liquidity. Improving investor confidence and increasing participation would be improved by three things: consolidated trade data to reveal true liquidity, alignment in post-trade processes, and regulatory and policy incentives that encourage retail and longterm institutional investors to engage more actively in European markets.
What role can exchanges and venues play when it comes to encouraging retail activity across equities and ETFs? Worrell: Retail participation is a major focus for us, both in the UK and across Europe via LSEG’ s pan-European MTF Turquoise. Reducing frictional costs is the first step. We’ ve waived trading, clearing, and market data fees for retail brokers and intermediaries, so that the benefits for retail investors can be enabled across the trading and post-trade lifecycle. Product innovation is also part of the solution. Our Turquoise Retail Max offering gives retail brokers a dedicated, transparent auction mechanism to access European equities with price improvement opportunities.
Beyond costs and innovation, we are seeing a broadening of access to trading. In October, the FCA will open retail access to Crypto ETNs, and it has also announced that it will ease the process for UK listed companies to issue corporate bonds and make them more accessible for retail investors. In the Leeds Reforms, the UK Government announced an industry-led ad campaign to explain the benefits of investing [ in stocks and shares ] to retail consumers. The London Stock Exchange is one of the many financial services
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