The rain in Spain stays mainly on the BME
First Published Wednesday, 28th September 2011 02:27 pm from Fidessa : Steve Grob
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fell definitively below 50% whilst at the same time title="BME share IBEX 35"
target="_blank">BME's market share in the IBEX 35
remained stubbornly close to 100%.
href="http://fragmentation.fidessa.com/wp-content/uploads/capture_final.png"> class="aligncenter size-full wp-image-2913" title="capture_final"
alt="" width="650" height="303" />Both markets are
in Europe - check. Both are subject to the MiFID
directive - check. Both have significant levels of liquidity -
check. So what is going on?
The difference was
highlighted at a Fidessa seminar in Madrid last week that brought
together key participants from Spain's equity markets to try and
understand why the fragmentation dial in Spain just refuses to
budge. The reason most often trotted out is that all Spanish
trades still have to be "put through" the
target="_blank">BME, although the introduction of
Title V removes this requirement.
target="_blank">Chi-X certainly is gunning for Spain
stocks. Will this be enough to turn the tide? Perhaps,
but as in other countries Spain will need the active
participation of the high frequency liquidity providers too, and
I haven't seen too many of them getting their Spanish phrase
books out just yet. The other issue, though, is that assuming
Spain does follow the pattern of other countries, then it's
target="_blank">Turquoise will be the winners and
that may not necessarily be good for Spain plc. This fact,
combined with the intertwined relationships that surround the
target="_blank">BME and its key trading members,
means that Spain may remain an anomaly for a while yet.