Aite Group’s report entitled ‘Post-MiFID European market: can reality catch up to the hype?’, published Wednesday, predicts that with the expected further proliferation of European execution venues, competition for European market share will only intensify as MiFID rolls out.
The report examines the existing exchange environment and its competitive landscape in the post-MiFID European market. It also analyses the potential adoption rate for alternative execution venues in their upcoming battle against the incumbent exchanges.
Aite Group finds that automation of the entire trade lifecycle will become even more important as firms struggle to comply with MiFID compliance reporting. "The de facto, monopolistic nature of some of the exchanges will certainly be threatened in the post-MiFID reality, as multilateral trading facilities and dark pools continue to multiply and spread throughout Europe, touting anonymity, speed, low market impact and low execution fees," says the report.
"Despite predictions that exchanges will suffer most as a result of MiFID, the reality is that they still hold the key to their ultimate fate in a post-MiFID world," comments Sang Lee, managing partner, Aite Group and author of this report. "In fact, under MiFID, exchanges should feel compelled to penetrate other financial markets to boost overall market share and revenue, and seek the opportunity to trade new instruments including highly profitable OTC products," continues Lee.