A new study from Boston-based consultancy Aite Group predicts rapid take-up of multilateral trading facilities (MTFs) in Europe following the introduction of MiFID, with volumes on alternative systems expected to increase steadily from around three per cent at the end of 2007 to over 20% by the end of 2011.
The report predicts that with the expected further proliferation of European execution venues - such as Turquoise, Chi-X Europe, Equiduct, Euro Millennium, ITG Europe and Liquidnet Europe - competition for market share will only intensify as MiFID rolls out.
As MTFs and dark pools continue to multiply and spread throughout Europe, the "de facto, monopolistic nature of some of the exchanges will certainly be threatened in the post-MiFID reality", says Aite Group.
However, despite predictions that exchanges will suffer most as a result of MiFID, the reality is that the exchanges still hold the key to their ultimate fate in a post-MiFID world, adds Sang Lee, managing partner at Aite Group.
"In fact, under MiFID, exchanges should feel compelled to penetrate other financial markets to boost overall market share and revenue and seek opportunities in other instruments, including highly profitable OTC products," says Lee.