THETRADETECH DAILY THE OFFICIAL NEWSPAPER OF TRADETECH 2024
discussions ? Both Euronext and Deutsche Börse have set their sights on dark trading in the last year . Euronext confirmed in May 2023 that it was set to launch a dark trading service . The service went live trading in March but has seen slow uptake as of yet .
This news was followed by rival exchange Deutsche Börse announcing own its plans to develop a midpoint trading functionality in March earlier this year . The new functionality has an envisaged launch of November . Known as ‘ Xetra Midpoint ’, the functionality is a customer-driven project according to Deutsche Börse and will be integrated into the Xetra market . The events around the DVC correction when laid alongside the recent launches paint an interesting picture and begs the question : what is Europe trying to achieve ?
Europe as a region is one of the most fragmented markets to trade with three times the number of exchanges as the US , 10 times the number of listing venues and 20 times as many post-trade providers . Central to many panels at recent events is the level of fragmentation Europe has reached alongside its comparatively low volumes to the rest of the world . While fragmentation is essential to competition , it can go the other way and harm markets by causing investors to widen the prices they show and reduce their size . Speaking at a recent Bloomberg Intelligence event which explored ' liquiditiy in transition ,' Eleanor Beaslety , COO , equity execution , Goldman Sachs , said : “ Innovation is great and if something has a USP that brings more volumes into Europe , that ’ s great . What we don ’ t need is more of the same . There are a number of dark books . The interesting thing with primary markets is potentially they have unique liquidity in regions that are very national so that could lead to more liquidity coming to the fore . Where it ’ s just another venue , it ’ s expensive and it ’ s another overhead .”
Moving from a micro focus to a macro one With volumes in Europe on a continuous decline – seen most drastically on the lit continuous order books – it forces participants to question whether or not regulators are focusing on the right areas , with many participants suggesting we should zoom out from these timeconsuming micro debates and assess the wider macro landscape to support growth
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