It's been interesting to watch the European MTFs

jockeying for position over the summer. Seems like title="Chi-X"

href="http://fragmentation.fidessa.com/venuestats/euvenuestats/?venue=CHIX&venuedesc=Chi-X&region=EU"

target="_blank">Chi-X is continuing to grow its

market share of all European indices fairly steadily, whilst the

relative market shares of

href="http://fragmentation.fidessa.com/venuestats/euvenuestats/?venue=BATE&venuedesc=Bats+Europe&region=EU"

target="_blank">Bats Europe and the LSE's title="Turquoise"

href="http://fragmentation.fidessa.com/venuestats/euvenuestats/?venue=TRQX&venuedesc=Turquoise&region=EU"

target="_blank">Turquoise could be starting to

invert. href="http://fragmentation.fidessa.com/wp-content/uploads/Focus3.png"> class="aligncenter size-full wp-image-2823" title="Focus"

src="http://fragmentation.fidessa.com/wp-content/uploads/Focus3.png"

alt="" width="621" height="333" />

This could possibly be down to

href="http://www.tradeturquoise.com/tq_services.shtml"

target="_blank">Turquoise's spangly new matching

platform attracting the HFT folks, or perhaps

it's simply that the market is rebalancing itself in

anticipation of the

href="http://www.batstrading.co.uk/resources/press_releases/BATS-Chi-X-Extend-Deal-FINAL.pdf"

target="_blank">merger between BATS and Chi-X

Europe. Assuming that

href="http://batstrading.com/" target="_blank">BATS

and

href="http://www.chi-xeurope.com/home/home.asp"

target="_blank">Chi-X do complete their merger, then

it's only natural for the combined volume to shrink back a bit as

there will be fewer order books around to make prices or match

flow on.

href="http://www.tradeturquoise.com/"

target="_blank">Turquoise has also learnt the

effectiveness of price promotions, especially in seizing market

share from

href="http://www.euronext.com/landing/indexMarket-18812-EN.html"

target="_blank">NYSE Euronext and title="Deutsche Börse"

href="http://deutsche-boerse.com/dbag/dispatch/en/kir/gdb_navigation/home"

target="_blank">Deutsche Börse.

On this point, it's also worth taking a look at title="Deutsche Börse"

href="http://deutsche-boerse.com/dbag/dispatch/en/kir/gdb_navigation/home"

target="_blank">Deutsche Börse's own

pan-European platform,

href="http://deutsche-boerse.com/dbag/dispatch/en/kir/gdb_navigation/trading/10_trading_platforms/200_xetra/110_XIM"

target="_blank">Xetra International Market (XIM).

Although total volumes are still modest, it looks like the

Germans have learnt the same lesson about focus and how it is the

key to wresting market share from your competitors. The chart

below shows that whilst market share for

href="http://deutsche-boerse.com/dbag/dispatch/en/kir/gdb_navigation/trading/10_trading_platforms/200_xetra/110_XIM"

target="_blank">XIM in most indices has fallen, it

is making really good progress in Italy and growing its share of

the FTSE MIB.

href="http://fragmentation.fidessa.com/wp-content/uploads/XIM1.png"> class="aligncenter size-full wp-image-2825" title="XIM"

src="http://fragmentation.fidessa.com/wp-content/uploads/XIM1.png"

alt="" width="511" height="349" />

By focussing all your efforts on one index, it's

possible to create real momentum and compel participants to

consider your alternative venue in their routing tables. This is

what underpinned

href="http://www.batstrading.co.uk/" target="_blank">Bats

Europe's approach and was why it was able to

be so successful without being either first (like title="Chi-X" href="http://www.chi-xeurope.com/home/home.asp"

target="_blank">Chi-X) or having ready-made

liquidity provision (like

href="http://www.tradeturquoise.com/"

target="_blank">Turquoise).

Finally, when will something ever happen in Spain? I

keep tapping the fragmentation dial for

href="http://fragmentation.fidessa.com/indexstats/euindexstats/?index=.IBEX.MA&indexdesc=IBEX&region=EU"

target="_blank">IBEX but as you can see it's hardly

budged. Despite promises to open up clearing, the title="Bolsa de Madrid"

href="http://www.bolsamadrid.es/esp/portada.htm"

target="_blank">Bolsa de Madrid still has over 98%

share of its primary index. Given that the Spanish market is the

sixth largest in Europe (based on our data for July) it would

seem to be a prize that both primary and alternative venues

should be striving for. I wonder if we'll see things change in

Spain by the end of the year and, if so, whether it will be one

of the pan-European MTFs that dominates that market or a local

Iberian variety?