European equity markets are enjoying renewed strength, with investor demand rising and trading volumes reaching record highs. Underpinning this is a well-established, competitive, multi-venue trading ecosystem that supports a diverse range of investor participation, enhances execution quality and benefits end investors.
Alex Dalley
This progress comes at a potentially pivotal point for retail investing in Europe. Rising financial literacy, continued growth in digital investing platforms and the transfer of wealth to younger, more digitally engaged generations are creating the conditions for growth in retail participation.
As policymakers advance efforts to strengthen Europe’s capital markets, the priority should be to tackle the barriers that still limit retail participation while preserving the strengths of a trading market structure that is functioning effectively. Tax incentives, such as Sweden’s ISK accounts and the UK’s ISA rules, along with other demand-side initiatives are obviously key to driving retail participation, but market structure also has a role to play. We believe three areas deserve particular attention:
- Addressing post-trade fragmentation
- Making market data more accessible
- Creating a more consistent pan-European retail trading framework
Getting post-trade infrastructure right
Firms trading across Europe must still connect to multiple clearing and settlement systems, creating operational complexity, increasing costs and tying up capital that could be deployed more productively.
Broader adoption of interoperable clearing arrangements between central counterparties (CCPs) would allow participants to consolidate activity through a single CCP, regardless of execution venue, delivering capital, margin and settlement efficiencies.
While interoperability exists in parts of Europe, its application remains inconsistent. Extending it across major cash equities markets, alongside open-access arrangements for central securities depositories, would reduce fragmentation, improve efficiency and support broader market participation, particularly for retail.
Making market data more accessible
Historically, firms have had to source European market data from multiple venues, creating high costs and complexity. As a result, some firms have limited their use of market data or chosen not to participate in Europe altogether.
The launch last month of the EU consolidated tape for equities and ETFs by EuroCTP is designed to address this issue. By bringing together market data from multiple venues into a single source, it offers a simpler, pan-European view of market activity and has the potential to become a meaningful catalyst for participation, particularly among retail investors.
It should not be the end of the journey. Regulators should now focus on expanding the depth of data available and – as an absolute minimum – introducing venue attribution in the pre-trade feed, allowing users to identify the source of individual quotes and increasing the tape’s value.
Creating a more consistent retail trading framework
Another challenge is the lack of a common retail trading model across Europe. The UK operates an RFQ-based retail service provider (RSP) network, Germany has historically permitted payment for order flow (PFOF), while in some countries retail trading primarily takes place on-exchange. It is an inconsistency that makes it harder for pan-European retail brokers and platforms to scale.
Recent regulatory developments may help align these approaches. The EU-wide ban on PFOF from June 2026, alongside the FCA’s decision to require RSP participants to comply with tick-size rules, should support on-exchange retail trading.
We believe regulators could go further, specifically by encouraging greater retail participation on multilateral order books. Retail flow represents valuable liquidity for other market participants to interact with and bringing more of this activity on-exchange would help strengthen attractiveness of order books, improve liquidity and support more robust price formation.
The US experience highlights the risks of retail activity migrating predominantly off-exchange, separating retail and institutional liquidity into distinct ecosystems and reducing the role of public markets in price formation.
Industry has a role to play
Of course, increasing retail participation is not solely a regulatory challenge. Venues, brokers and asset managers all have a part to play in making retail investing more accessible, attractive and cost-effective.
At Cboe, these principles have informed the development of our pan-European retail offering. Launched in 2025, the Cboe Europe EBBO Retail Service enables brokers to execute retail orders free of charge at or better than the European Best Bid and Offer (EBBO) across more than 9,000 stocks and ETFs in 18 countries. Integrated into Cboe’s lit order book and supported by a dedicated retail liquidity provider programme, it provides brokers with a cost-efficient pan-European solution while helping retail investors achieve improved execution outcomes in a transparent and highly regulated environment – where retail and institutional activity can interact.
The model has already gained significant traction. By 31 August 2026, retail executions against retail liquidity providers through the service had exceeded €10 billion, with 15 brokers and eight dedicated retail liquidity providers participating.
We have also been expanding our symbol universe to include growth companies from across Europe and the UK, extending our cost-effective, simple, pan-European trading and reporting services to a segment of the market that is increasingly important for both institutional and retail investors.
Conclusion
Europe has the momentum, policy focus and market infrastructure required to build a genuinely competitive and retail-friendly capital market. The task now is to stay focused on the reforms that matter most.
