Liquidity Landscape Q1 2021
Despite some moderate fluctuations in the market share of auctions and SIs, the post-Brexit liquidity landscape continues to be stable with daily volumes traded averaging €56B in March up from an average of €43B in Q4 20201. However, the regulatory agenda for 2021/22 is set to keep the industry busy for near future, with the intention to revisit financial regulation both in the EU and the UK.
The recent announcement by HM Treasury2 to remove the Share Trading Obligation and the Double Volume Cap emphasizes the extent to which initial divergence appears inevitable. The FCA kicked off a series of consultation papers (CP) in April with the Conduct and Organisational requirements3.This will be followed by the Wholesale Markets Review in June, and then the MiFID/R review from ESMA CP in July, which will focus on proposed changes to RTS 1 and 2.
The report has been compiled by Gareth Exton and Joe Fields from Liquidnet's Execution + Quantitative Services team, in partnership with Rebecca Healey and Charlotte Decuyper, Redlap Consulting.
1 Source: Bloomberg, EMEA Monthly Market Share 2018 to date
2 Source: gov.uk/government/news/ambitious-plans-to-boost-uk-fintech-and-financial-services-set-out-by-chancellor
3 Source: fca.org.uk/publications/consultation-papers/cp21-9-changes-uk-mifid-conduct-organisational-requirements