Our privacy policy describes how Fidessa uses cookies on our website. If you continue using our website, you are consenting to our use of cookies. OK

The rain in Spain stays mainly on the BME

Interesting contrast last week where the LSE’s market share of the FTSE 100 fell definitively below 50% whilst at the same time BME’s market share in the IBEX 35 remained stubbornly close to 100%.

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 BME, although the introduction of Title V removes this requirement.

Chi-X certainly is gunning for Spain and has introduced a price promotion on 6 key Spanish 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 likely that BATS, Chi-X and 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 BME and its key trading members, means that Spain may remain an anomaly for a while yet.

Comments
One Response to “The rain in Spain stays mainly on the BME”
  1. Eeki Mantere says:

    Isn’t this once again proof of the EU being a non-functional club? Four years after MiFID has been implemented, Spain still “considers what to do” and protects its local market from open competition. And nobody within EU seems to care, react or require anything. Simply incredible. No wonder we have cases like Greece blowing up. Who takes responsibility of making sure that agreed things are implemented within the EU?

Leave a comment

Copyright © 2018 Fidessa group plc. All rights reserved.

The information contained within this website is provided for informational purposes only. Fidessa will use reasonable care to ensure that information is accurate at the time it is made available, and for the duration that it remains on the site. The information may be changed by Fidessa at any time without notice. We also reserve the right to close the website at any time. No representation or warranty, expressed or implied, is given on behalf of Fidessa or any of its respective directors, employees, agents, or advisers as to the accuracy or completeness of the information or opinions contained herein or its suitability for any purpose and, save in the case of fraud, all liability for direct, indirect, special, consequential or other loss or damages of whatever kind that may arise from use of the website is hereby excluded to the fullest extent permitted by law. Any decisions you make based on the information in this website are your sole responsibility and information on the website should not be relied upon in connection with any investment decision.

The copyright of this website belongs to Fidessa. All other intellectual property rights are reserved.

Fragulator® is a registered trademark of Fidessa group plc.

Reproduction or redistribution of this information is prohibited except with written permission from Fidessa.