The European Securities and Markets Authority (ESMA) has launched a call for evidence, as the regulatory body looks to address notable shifts and mechanisms shaping European equity market structure in recent years.
The paper makes use of Mifir transaction reporting data available between 2022 and 2025 to provide an analysis of the European stock market trading landscape, with the aim of requesting feedback from stakeholders on the trends identified, as well as which areas of development to address.
Stakeholders can share their views on the functioning of European markets by 30 June 2026, and ESMA is set to issue a feedback statement on the call for evidence in H2 2026.
The study makes direct reference to “concerns [which] have been mounting in recent years regarding shifts in the structure of European equity markets,” relating to “issues such as a marked increase in dark trading, a corresponding decrease in lit continuous trading and a rise in bilateral trading arrangements such as those involving systematic internalisers (SIs).”
ESMA also goes on to state that it “seeks to offer an assessment of how liquidity is evolving, how it is distributed across different types of liquidity pools, and what this means for the functioning of the market, both in the short- as well medium-term.”
The call for evidence has also been welcomed by entities such as the Association for Financial Markets in Europe (AFME), which recognised the importance of the paper’s publication amid the recent EU Market Integration and Supervision Package (MISP) and related initiatives.
In a statement, AFME asserted: “Crucially, ESMA’s analysis make it clear that there is no case for far‑reaching intervention to fundamentally redesign where and how equity trading takes place.
“At a time when the EU is trying to simplify regulation, attract long‑term investment, and close the gap with global competitors, aggressive market‑structure reform would risk increasing complexity, reducing competition and innovation, and ultimately working against the core objectives of MISP.”
Stunted on-book trading and closing auction growth
Within the call for evidence, ESMA has highlighted certain shifts and trends within European market structure, with the paper divided into four main sections to address these themes.
Specifically, there is a focus on the evolution of addressable and non-addressable liquidity, as well as on-book versus off-book trading between 2022 and 2025.
Within the paper, ESMA states that on-book, lit continuous trading, periodic auctions and dark trading are considered as addressable liquidity in this context.
Read more – Europe increasingly becoming a patchwork of auctions and off-exchange trading, finds report
In its findings, ESMA indicates that on-book trading, has remained relatively stable compared to off-book trading, constituting 75-80% of the share of addressable liquidity in European markets.
Despite this, the importance of SI trading, as well as increased activity in closing auctions and frequent batch auctions (FBAs) has also become a core part of European market structure, contributing to the decline of on-book trading over time.
A further sector reviewed in the paper is the importance of closing auctions and trade at the close.
One figure within the study revealed that the market share of liquidity at the closing period has remained mostly stable from 2022 to 2025, increasing 1.3 percent, from 18% to 19.3%.
Read more – Europe’s closing auction is a critical pillar, but not without its obstacles
These findings indicate that in comparison to previous years, which saw the closing auction becoming a significant liquidity event in European equities, its growth has slowed down, and the small increase over this time period shows that this trend appears to be flattening, rather than accelerating.
In addition to the publication of the call for evidence, ESMA has also confirmed that it had repealed its earlier Q&A guidance, stating that periodic auctions must follow tick-size rules.
The move aligns with ongoing updates to ESMA’s Q&As regarding market structure issues under Mifid II and Mifir, with further developments and reviews expected to continue over the coming months.