Pan-European multilateral trading facility Chi-X rose up the ranks of market data firm Thomson Reuters’ monthly market share tables in August, and rival equities trading platform Turquoise, which launched officially on Monday, has already garnered 4% of trading in the UK’s FTSE 100 index, according to latest figures from the MTF.
Chi-X’s market share of European equities trading measured by value grew to 5% in August from 4.23% in July, moving it up to sixth place in Reuters’ table. This puts it ahead of SWX Europe and OMX on a pan-European basis. In the UK alone, Chi-X has made even more progress. Its share of trading value in the UK’s FTSE 100 index grew to 11.74% in August from 8.91% in July. If OTC reporting venues such as Markit BOAT are stripped out, Chi-X’s share of FTSE 100 trading grows to 16.06% in August, up from 12.01% in July.
“What we are seeing is increased fragmentation as evidenced by Chi-X’s growing market share in Europe’s most liquid stocks,” said Andrew Allwright, product manager for MiFID solutions at Thomson Reuters.
By contrast, some big exchanges suffered drops in their European market shares. The London Stock Exchange’s share of European equity value fell to 18.30% in August from 20.95% in July. Similarly, Euronext’s share dropped to 12.44% in August from 14.89% in July. The odd one out was Deutsche Börse – its market share increased to 16.16% from 14.94%.
Allwright at Reuters put some large exchanges’ waning share down to two factors. “One is that there is genuine competition between the new venues and the exchanges, which is obviously having some impact, as shown by the report, plus the potential higher volumes of reporting through the OTC venues – numbers which people are treating with a bit of caution at this stage because of the potential for double reporting,” he said.
Turquoise made its debut in Reuters’ market share study in August, but its shares were small – below 1% – because it launched on August 15 and was in its limited launch phase for most of the remainder of the month.
“It will be quite interesting to see how the September market share numbers are affected by the fact that both Chi-X and Turquoise will have been running simultaneously for most of that month,” said Allwright. “It remains to be seen whether the two firms between them will grab more market share from the exchanges, or whether they will divide the existing pot between them.”
It seems that Turquoise is already making headway. It garnered a 4% market share in the FTSE 100 securities trading on its platform on Tuesday, and a share in excess of 10% on 35 of its stocks. On the same day, the platform grabbed a Europe-wide market share of 2.95%.