Brexit fragmentation

MiFID brought market fragmentation to Europe back in 2007. In broad strokes incumbent exchanges lost market share to newcomer MTFs predominantly located in the UK. For UK stocks this meant that the fragmentation occurred within their home country, whereas EU27 stocks moved partly to London.

But how will that change with Brexit? Will markets bifurcate? Will volume return to continental Europe? Or will everything continue much as it is today? Unfortunately none of us has a reliable answer to those questions, yet.

Stocks traded in a single jurisdiction will likely continue to be traded locally, but it is anyone’s guess what will happen to those instruments that are traded in the UK and the EU27 in roughly equal amounts. Looking at the turnover for a large sample of EU stocks in the Fidessa Fragulator (removing Swiss, British and generally illiquid stocks), roughly 230 different shares (representing about 2 trillion Euros in turnover in 2017) fall into that category. It will be interesting to track what happens to those instruments if trading across the Channel becomes more challenging post-Brexit.

Leave A Comment

Copyright © 2018 Fidessa Group Holdings Limited. All rights reserved.

The information contained within this website is provided for informational purposes only. Fidessa will use reasonable care to ensure that information is accurate at the time it is made available, and for the duration that it remains on the site. The information may be changed by Fidessa at any time without notice. We also reserve the right to close the website at any time. No representation or warranty, expressed or implied, is given on behalf of Fidessa or any of its respective directors, employees, agents, or advisers as to the accuracy or completeness of the information or opinions contained herein or its suitability for any purpose and, save in the case of fraud, all liability for direct, indirect, special, consequential or other loss or damages of whatever kind that may arise from use of the website is hereby excluded to the fullest extent permitted by law. Any decisions you make based on the information in this website are your sole responsibility and information on the website should not be relied upon in connection with any investment decision.

The copyright of this website belongs to Fidessa. All other intellectual property rights are reserved.

Reproduction or redistribution of this information is prohibited except with written permission from Fidessa.