At Christmas, markets slow down, year-end reflections begin — and the “lights come on” …in European ETF trading.
For many years, ETF execution across European venues has been dominated by RFQs. While often described as bilateral, modern RFQ workflows are no longer chat-based or manual. Today, they are highly automated, fast, and deeply embedded in electronic trading systems.
With this evolution, RFQs have traditionally kept a large share of ETF liquidity out of the lit market. Our latest data suggests that this balance is starting to change. This Christmas, ETF trading is quietly stepping into the light.
RFQs: The biggest gift under the tree, but not the only one
RFQs remain the single largest execution channel for ETFs in Europe, but their market share is declining. From close to 47% in early 2024, RFQs have fallen to below 40% by Q4 2025.
This is not a rejection of RFQs. Modern RFQs are efficient, electronic, and highly scalable. However, they increasingly coexist with other execution methods as trading strategies become more sophisticated and more systematic.
Lit markets are shining brighter
At the same time, lit (CLOB) trading is gaining visibility. Lit market share has risen steadily, reaching over 23% in Q4 2025, the highest level in the dataset.
This reflects growing confidence in central order books for ETF execution, supported by deeper liquidity, improved market making, and more intelligent routing.
Retail's stocking is getting fuller
Another clear trend is the rise of retail trading venues, whose share has increased from around 4.5% to more than 7% in under two years.
This growth is driven by structural changes in how ETFs are accessed:
These flows naturally align with lit markets and passive execution strategies, reinforcing the shift towards greater transparency.
Why algos are helping Santa
Algorithmic execution is a key enabler of this transition — not simply for automation, but for better outcomes.
ETF algos are increasingly designed to:
As a result, more ETF flow can be executed systematically and efficiently in lit markets, while still retaining the option to fall back on RFQs or OTC liquidity when conditions require it.
Every snowflake is different: market structure is product-specific
It’s important to note that these figures reflect all ETFs traded across all European venues. ETF market structure is not uniform — each product has its own liquidity profile, driven by factors such as:
Some ETFs will naturally remain RFQ-dominated, while others are increasingly suited to lit, algorithmic execution. Understanding these differences is critical.
Bright lights, clear insights
As ETF trading becomes more complex and more diverse, transparency becomes essential. This is where data and analytics play a central role. For ETF issuers and investors alike, the ability to:
is no longer a nice-to-have — it’s essential for informed decision-making.
Moving up the Christmas list
This isn’t a loud revolution. It’s a gradual, structural change that is easy to miss without the right data. But as we head into 2026, European ETF trading is becoming smarter, more transparent and more systematic.
This Christmas, ETF trading isn’t abandoning tradition. It’s simply stepping into the light.
Please contact us here to find out more.