20 October 2017
Steve Grob

Fidessa Fragmentation Index

Steve Grob - Fidessa

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The sound of the drums

08 February 2011  |  2691 views  |  0

It’s an interesting time to be a pan-European exchange operator like NYSE Euronext as it seems to be taking fire from all sides. As pointed out by FT Trading Room, the revamped Equiduct is now starting to nibble at NYSE Euronext’s Paris market share as Equiduct's top ten stocks (by value) are now all French.

Meanwhile the most recently formed MTF, TOM, is doing exactly the same thing in Amsterdam. In fact, the new Dutch venue is already accounting for around 5% of lit trading in certain stocks (Tom2.am, for example), as the chart below shows.

On top of this, it was also reported that TOM is suing NYSE Euronext over the latter’s refusal to allow TOM to join its LIFFE derivatives market.

Even the LSE is weighing in by offering an aggressive taker fee for NYSE Euronext listed stocks through its own MTF, Turquoise, and by promising to create competitive contracts to those listed on NYSE Euronext, too.

Another primary, NASDAQ OMX, also looks like it’s feeling the squeeze. Last week, Nordic specialist Burgundy claimed over 14% of trading in the flagship Swedish stock Nokia.

It would appear that the new guys have done their marketing homework and recognised that focus and flexibility are the key weapons when taking on a bigger rival (a lesson demonstrated very well by the folks at BATS since their launch in Europe).

With the liquidity landscape set to change again there could be a real future for the smaller niche venues. If this is true, then the primary exchanges should be listening out for the sound of smaller competitors and adjusting their defences accordingly.

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job title Director of Group Strategy
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I am responsible for strategic development at Fidessa. This includes the development of new geographic markets and strategic partnerships and driving new industry initiatives. As part of this I head u...

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