European Equity Markets Reach new Highs, Witnessing a Significant Increase
In the dynamic world of European equity trading, traditional exchanges are now facing stiffer competition, not just on cost, but also on innovation, speed, and transparency. This shift is largely driven by the rapid growth of Systematic Internalisers (SIs), private trading venues run by investment banks and market makers.
According to Mark Montgomery, Chief Commercial Officer at big xyt, the competition in European equity markets has intensified significantly. In the first half of 2025, SIs experienced a 46% year-on-year growth, outpacing other trading venues such as traditional exchanges, dark pools, and over-the-counter (OTC) trading. These SIs now represent the fiercest competitors for trading order flow in European equities.
The growth of off-exchange trading requires close attention, as it could have implications for maintaining a fair and resilient market structure. While OTC trading slipped slightly, losing 1.4% of its relative share during the same period, SIs have gained significant ground. Financial institutions are increasingly seeking customised execution and price improvement opportunities provided by SIs.
The emphasis on keeping pace with the shift to off-exchange trading highlights the intensity of competition across Europe's equity markets. Total market turnover reached €2.1 trillion in March 2025, due to the increase in equity trading volumes. However, traditional "lit" exchanges posted a modest 0.6% gain, while dark pools accounted for approximately 8-9% of equities traded during the first half of the year.
Periodic auctions remained flat, accounting for about 2-3% of activity in European equity markets. This shift to off-exchange trading is particularly important in periods of unpredictability, as it offers a more agile and flexible trading environment.
Montgomery, Chief Commercial Officer at capital markets analytics firm big xyt, stated that the growth of off-exchange trading could impact the market structure significantly. He emphasised the importance of keeping pace with this shift, as competition for order flow has never been more intense across Europe's equity markets. Maintaining a fair and resilient market structure demands that all participants keep pace with the shift to off-exchange trading.
Off-exchange trading could challenge traditional exchanges to compete not only on cost but also on innovation, speed, and transparency. In such periods, transparency and reliability matter most. As the landscape of European equity trading continues to evolve, it is crucial for all participants to adapt to the customised execution and price improvement opportunities provided by off-exchange trading.
