The European Equity Trading Quorum met on 7 October in London (remote participation ex-London).

Themes: Market transparency and price formation | Decline of central order books | European market integration and consolidated tape

Summary: The October meeting of the European Equities Quorum discussed FCA’s CP 2025 and the European Commission’s Capital Markets consultations, both pivotal for market transparency and competitiveness. Participants debated the decline in central limit order book trading and its implications for price formation, investor confidence and market fairness.

The group supported the European consolidated tape, expected by mid-2026, but warned that standardisation and common usage will be the determinants of its success. Broad consensus emerged that excessive fragmentation and over-regulation have hindered Europe’s competitiveness with the US.

Market structure and price formation

Discussion opened with the FCA’s question: Does declining share trading via central limit order books challenge price formation? Participants agreed that market dynamics have evolved beyond the binary “lit vs dark” debate. Bilateral liquidity and alternative execution mechanisms have delivered efficient outcomes for many buy-side participants, yet the erosion of a strong reference market has introduced concerns over transparency and price consistency.

Some participants urged regulators to protect choice, not channels, arguing that market quality depends more on competition and cost efficiency than on mandating trading venues. Others were concerned that if bilateral activity continues to expand without a clear reference price, the market risks losing its anchor for valuation and investor trust.

Regulatory consultations and competitive positioning

The FCA 2026 consultation will target transparency in equity markets, while the European Commission’s initiative aims to deepen capital-market integration and restore Europe’s competitive footing. Participants viewed both exercises as necessary, provided that the outcome of the exercise avoided undue and additional regulatory complexity.

Several participants linked current market fragmentation to prior regulatory interventions, citing the double volume cap and inconsistent reference-price waivers as factors that had hitherto created today’s patchwork of trading models. The prevailing view: Europe needs fewer rules, better alignment and a renewed focus on reducing the full cost of trading — from clearing and settlement to market data and tax.

Consolidated tape – promise and practicality

Discussion around the long-awaited European consolidated tape- the first provider decision is expected by year-end 2025 with a go-live target of around mid-2026. Participants supported the initiative as a foundation for transparency but stressed that usage standards, data quality and latency will define its value. Without agreed filters and consistent post-trade reporting, the tape risks adding another layer of cost without achieving desired clarity.

Several attendees advocated a joint UK–EU approach to prevent duplication and ensure a single reference framework. Others highlighted the importance of using the tape to establish multiple reference prices, supporting market resilience during outages and avoiding over-reliance on any single venue.

Consolidation, clearing and global competitiveness

The discussion broadened to Europe’s structural disadvantage relative to the US per: fragmented post-trade systems, multiple CSDs, and national interests that impede consolidation. Participants endorsed the idea of treating the post-trade environment as a utility, urging political will to harmonise clearing and settlement.

While recognising Europe’s diversity, the group agreed that reducing the fully loaded cost of execution is essential to attract global capital. Many noted that hedge funds and systematic firms avoid Europe simply because trading here remains too expensive.

Collaboration and next steps

Despite differing views on regulation, there was consensus around the need for continuing collaboration between buy and sell sides, trading firms and service providers.

The session closed with a reminder that Quorum 15 is uniquely positioned to bring industry and regulators together under neutral conditions - not to lobby, but to create shared understanding across Europe’s fragmented equity landscape.