Over the past two decades, Mifid and Mifid II have reshaped Europe’s equity market structure – encouraging competition, broadening investor choice, and introducing trading mechanisms that have contributed to greater transparency, innovation, and improved execution outcomes across the continent. 

The region is now entering another significant phase of regulatory development through the EU’s Market Integration and Supervisory Package (MISP), which is intended to deepen capital markets integration, harmonise supervisory approaches and encourage greater retail investment. The timing of these reforms couldn’t be better, aligning with significant shifts already taking place within the landscape. Europe has become increasingly prominent for global investors, reflected in record levels of trading activity in 2025 which has continued into this year. At the same time, market structure continues to evolve rapidly, with intense competition for order flow across multiple trading mechanisms, signs of increasing retail participation, and growing interest in extended trading hours to meet global demand. 

Against this backdrop, MISP offers the perfect opportunity to update and refine the regulatory framework established under Mifid – building on its achievements while addressing areas where targeted adjustments are needed to lay the foundations for a more open, integrated, and globally competitive market. 

Clearing competition: A necessary reform 

If Europe wants deeper, more efficient, more integrated capital markets, the post-trade environment is where the greatest improvements can be delivered. Today, the lack of mandated clearing interoperability for large equities exchanges, combined with discriminatory “preferred” arrangements, raises costs and operational complexity for market participants.  

This fragmentation directly undermines the goals of integration and efficiency. Mandating full CCP interoperability for large cash equities exchanges would give participants real choice, allow them to consolidate clearing across multiple venues, create capital and operational efficiencies, and remove barriers to wider investor access. A similarly open and competitive framework for accessing CSDs – where participants can choose the most efficient option – is equally essential. 

A level playing field between on- and off- venue trading 

The landscape of Europe’s equity markets has fundamentally changed – not just in where trading happens, but how investors seek to achieve best execution. Trading behaviour increasingly shows that investors globally are adopting complementary mechanisms alongside traditional central limit order books (CLOBs) in search of even better outcomes.  Mechanisms such as periodic auctions, block platforms and systematic internalisers are now well-established parts of the European market ecosystem because of the distinct value they deliver to end investors.   

Their growth reflects evolving investor needs and more sophisticated execution strategies, rather than any fundamental weakness in market structure. Against this backdrop, it is essential to ensure that the regulatory framework treats all trading mechanisms fairly, and that rules operate as intended across both on and off-venue execution channels. Tick size provisions should be aligned so that organised venues can offer multilateral execution tools that deliver equivalent outcomes to those available off exchange, including the ability to match at the midpoint for all order sizes. A level playing field is critical to ensuring competition, innovation, and, ultimately, better outcomes for investors. 

Creating diverse, resilient lit order books, including retail 

Investor needs today are far more diverse than when CLOBs first emerged in 1969, helping to explain their declining share of overall trading activity alongside the growth of alternative venues. CLOBs will remain reliable venues for price formation and will continue to thrive as long as they are part of a broader exchange offering, accessible alongside other market models that meet differing trading needs. An area where they could be strengthened is through greater incorporation of retail order flow. While this is clearly about more than market structure alone – with tax policy and financial literacy initiatives key to driving overall retail participation – market design itself can play a role.  

We believe the EU should consider whether retail orders ought to be encouraged to execute on multilateral venues, such as CLOBs, rather than through off-exchange channels. Experience in the US and UK – where most retail trading occurs off-exchange – has resulted in a separation of retail and institutional liquidity, a dynamic that is ultimately unhealthy for both markets and investors.  

Supporting a better understanding of liquidity 

A high-quality, appropriately designed consolidated tape for equities will materially improve transparency, help investors better navigate Europe’s fragmented liquidity landscape and support more efficient cross-venue best execution. Attribution of quotes on tape, as proposed under the MISP package, is an essential addition to support informed decision making.  

But more can be done to improve understanding of liquidity. More broadly, the industry and regulators need to agree on simplifying and clarifying the tagging and reporting of different types of trading, and on what types of trading should be included in the consolidated tape. In particular, there is still a lot of noise being reported – ‘technical trades’ that do not contribute to price formation and that are reported as ‘off book on exchange’. Under current rules, these trades will feature on the tape and in the headline data (they account for nearly a fifth of all reported trading). Removing this noise will provide a clearer picture of overall European liquidity and allow for more efficient delivery of current market prices. 

A sensible approach to central supervision 

Under the current MISP proposals, we would expect to be centrally supervised by ESMA as a large cross‑border equities exchange. In fact, some elements of our business – including our Approved Publication Arrangement – are already subject to central supervision, and our experience shows that a consistent regulatory approach can deliver meaningful benefits in terms of efficiency, clarity, and market confidence. 

We recognise that greater central supervision of key market infrastructures can help the EU deliver on its objectives of increased harmonisation and market integration – but only if it is designed and implemented sensitively. Any changes must support competition and innovation, build on frameworks that are already functioning well, avoid unintended consequences, and prevent the introduction of excessive costs on the industry. 

We look forward to working closely with policymakers, regulators, and industry stakeholders on the detailed design and implementation.