Tell us a bit more about Europe’s current momentum, what’s driving it?
European trading activity has surged 28% year-to-date, reaching an average daily value traded of €87 billion with one quarter still remaining. Each quarter has set new records, underscoring the sustained momentum in regional markets. The momentum has been built on US policy shifts and geopolitical uncertainty, both of which have encouraged investors to rebalance portfolios toward European equities.
As a result, Europe now stands at a potential inflection point for renewed global capital inflows. The key challenge for the region will be to convert this heightened activity into a durable trend rather than a transient response to volatility. Sustaining investor engagement will depend on continued policy stability, earnings resilience, and confidence in Europe’s long-term growth narrative.
T+1, dark trading, periodic auctions, so many topics to cover – which is front of mind for you? What should the trading sphere be focusing on right now?
Europe’s transition to T+1 settlement is rapidly approaching, with 2027 no longer feeling far off. The region is eager to align with the US, where the move to T+1 was ultimately executed with minimal disruption. However, Europe faces a more complex landscape. The presence of multiple currencies, central counterparties, and central securities depositories means the path to implementation will be far less straightforward than in the US, where a single currency, CCP, and CSD simplified the transition. Early and coordinated preparation across market participants will therefore be critical to ensuring a smooth shift.
The introduction of the EU single volume cap in October marked a significant regulatory milestone. Following the change, the number of instruments subject to caps rose by 22%, reaching 325 -an outcome that may have exceeded initial market expectations. This development could encourage additional trading flow into periodic auctions as participants adjust their execution strategies.
Although the complete removal of volume caps remains unlikely, the experience of the United Kingdom – where double volume caps were abolished without a notable rise in dark trading – raises important questions. Even after the UK’s deregulation, dark trading in Europe continues to account for roughly ~6–7% of total market activity. Against this backdrop, the EU’s caps are viewed by some as an unnecessary layer of regulatory constraint, and there is growing debate around whether further liberalisation could better support market efficiency and liquidity.
With bilateral trading and SIs continuing to garner attention from buy-side liquidity seekers, how is regulation set to change things?
The buy-side community we engaged with expressed strong appreciation for the flexibility of tailored, bilateral liquidity offerings. However, the key challenge lies in striking the right balance of bilateral execution while preserving the integrity of the price formation process.
There has been a lot of discussion regarding the rise of bilateral trading whether that be SI, OTC or off book on exchange, while it has been on the rise when non–price-forming trades are excluded from overall activity, the data reveals a markedly different view of the scale and nature of bilateral trading.
Traders today have an extensive toolkit at their disposal to execute orders efficiently across a range of venues and mechanisms. During a recent discussion with a corporate issuer, I highlighted where their shares were actually being executed. They were surprised to discover that trading activity extended well beyond their primary venue. This underscores a broader issue and long debated within the industry the absence of a consolidated tape in Europe.
A comprehensive consolidated tape would serve to unify fragmented execution data, offering a more accurate and transparent picture of European liquidity. Such transparency would not only benefit corporate issuers but also international investors, many of whom remark that they lack a full understanding of European trading activity.
While some market participants feel that Europe is already subject to extensive regulation and therefore prefer stability over additional reform there remains scope to enhance transparency through targeted adjustments. One potential area of review could be the flagging of trades, which would help deliver a clearer and more consistent representation of market liquidity.
Looking at 2026, what’s the biggest market structure changes on your radar?
From a UK perspective, the anticipated reform of stamp duty represents a constructive step toward enhancing the country’s market competitiveness. The UK currently levies one of the highest stamp duty rates globally, placing retail investors at a disadvantage – particularly as they face no comparable tax when trading US equities.
The potential removal of stamp duty could therefore stimulate greater retail participation and reduce transaction costs across the investor spectrum, improving market accessibility and overall liquidity.
Another key area of focus is the evolution of research payment structures. The Financial Conduct Authority’s rules on joint payment of research, which came into effect in August of last year, were initially met with considerable industry hesitation a sentiment reflected in our recent survey of heads of trading.
However, market sentiment has become increasingly positive, with both buy and sell side participants anticipating a gradual shift toward commission sharing agreement accounts, from P&L in 2026.
Similarly, firms operating within EU member states will be permitted to adopt joint research payment arrangements from June 2026, aligning their framework with the UK’s. That said, the transition is expected to be measured, as buyside firms assess operational and compliance implications before making structural changes. In the same way it has taken time to develop in the UK.
Finally, 2026 likely to see a new entry into the European equity trading landscape, with OneChronos having secured FCA approval and awaiting EU authorisation. The firm’s differentiated trading model serve can serve as innovation into the market an additional source of liquidity rather than seen as further market fragmentation a development that the market will ultimately judge in practice.