The white-tipped fir trees, the crunch underfoot (and hoof), the twinkle in the moonlight, the icicles on your nose. The lazy wind - "doesn't go around you, goes straight through you." This is Christmas as it should be: sharp, bright, and bone-cold, with the promise of warmth waiting indoors.
Where would we be without a frosty backdrop for Father Christmas and all his activities at this time of year? It’s not clear whether Santa and his elves have been impacted yet by global warming, but earlier this autumn we saw the European regulators sit up and take notice for equities and insist that they no longer saw the need for double volume caps, and reduced the requirement to the single variety.
Clearly, they felt that increasing average temperatures had reduced the need for extra insulation from equity trading on venues without pre-trade transparency. The resulting changes surprised the community, with more stocks affected than expected and the net tightening around dark trading for stocks breaching the new single cap threshold.
None of this went unnoticed by Santa’s cousin, Quanta Claus, in his Lapland data lab. He’s a big client of ours and wanted to share thoughts on the changes he was observing. It seemed that the drivers for seeking dark activity were causing liquidity to shift from dark MTFs to Periodic or Frequent Batch Auctions in trades below Large In Scale in the capped stocks.
When we looked to see if SIs were similarly affected, there was some evidence for Continental European stocks but not really for UK or Swiss. This shows the Quanta was asking the right questions to confirm his suspicions about the regulatory changes and their repercussions. You can do the same by accessing our platform where you will find all sorts of exciting Market Structure Intelligence.
