In 2025, European markets experienced record average daily trading volume. Global investors allocated over €130 billion to European equities – a clear acknowledgment of the growth proposition in the region amid geopolitical uncertainty elsewhere. This trend has continued into 2026, with trading volumes and global investment remaining high. Europe has long been a global leader in promoting innovation in equity markets, facilitating alternative trading mechanisms to deliver better outcomes for end investors.
As EU policymakers debate the latest proposals for regulatory reform through the Market Integration Package (MIP), they must continue this positive momentum by keeping innovation and competition as the guiding principles.
While exchanges call for further restrictions on systematic internalisers (investment firms that execute client orders directly against their own balance sheets), policymakers should remain focused on addressing areas of the market that genuinely require reform, rather than intervening in parts of the ecosystem that are functioning well.
The areas which need the most focus are those where true competition is limited or absent.
Market data: a persistent cost problem
One such area is market data. Despite the introduction of the Reasonable Commercial Basis (RCB) framework, the cost of market data continues to rise sharply. Excessive fees limit access, stifle innovation, and create barriers for smaller firms. While the development of the EU consolidated tape – and proposals to enhance its depth – are a welcome step, it will not resolve the underlying issue on its own.
Effective implementation and enforcement of the new RCB rules, which enter into force later this year, will be essential to ensure that market data is provided on fair and transparent terms. Any price increases from existing pricing would be unacceptable. Market data providers must ensure that fees are linked to the cost of producing the data. In theory, this should prevent differentiated pricing for the same data based on who the consumer is.
Post-trade infrastructure: Europe’s real structural challenge
Another area where reform is needed is the post-trade ecosystem, where fragmentation and limited competition remain significant obstacles. Progress could be made through measures such as interoperability between major clearing houses, further expansion of the pan-European T2S settlement platform, and greater transparency around central securities depository (CSD) fees.
The cost and complexity of using Europe’s post trade infrastructure is a significant drag on the region’s global competitiveness. AFME research published in 2025 shows, market participants could save as much as EUR 1bn per year if European CSDs offered the same pricing structure as the US and Canada.
The real difference between EU and US markets
European markets are often characterised as being more fragmented compared to the US, but in reality, the trading landscape is broadly similar. In the US, liquidity is also spread across multiple venues, including 16 exchanges, more than 30 alternative trading systems (ATS) and more than 200 OTC venues.
The real difference lies in the post trade infrastructure, where activity is ultimately channelled through a single clearing house and CSD, bringing significant efficiency and cost savings. While a single CSD in the EU might not be a realistic proposition, increasing transparency, connectivity, and competition between EU CSDs should be a critical objective of the MIP.
Further gains may also be possible in cash equities clearing. Existing interoperability arrangements between 3 major CCPs have already helped reduce the impact of fragmentation and substantially lowered costs for end users. Extending this interoperability framework to additional major CCPs could deliver further benefits and allow market participants to consolidate their activity into a single CCP of their choice.
Innovation should remain the priority
Looking again at the US provides another useful perspective. A recent SIFMA report from February 2026 charts the evolution of market structure since 2016. The combined market share of the ‘big three’ (Cboe, NYSE and Nasdaq) has declined from around 64% to roughly 44%, with new exchanges entering the market and a steady growth of off-venue activity. However, trading volumes on the three largest exchanges have actually increased by a third during the same period. In other words, they now have a smaller share, but of a much larger market.
The focus in the US debate is increasingly on how the regulatory framework can support the next phase of innovation – through developments such as tokenisation or extended trading hours. Whatever the merits of those particular ideas, the key point is that the major players in the US are very much thinking about the future and not the past.
Competition breeds innovation, and innovation breeds growth. To give another example: the music industry experienced a significant transformation in the early 2000s, as digital distribution channels emerged and consumers’ preferences shifted from physical records to downloads and streaming.
The lesson from this for Europe’s equity markets is clear: the winners were not those who fought to preserve the status quo, but those who adapted, innovated and competed.