In a recently published article, the European Securities and Markets Authority (ESMA) gives a glimpse of the effects of the Markets in Financial Instruments Directive (MiFID II). Titled “Evolution of EEA share market structure since MiFID II”, it focuses on the period between 2019 and 2022, and especially on the impact of Brexit, due to the event’s “pivotal role” in equity markets.

The report states that “the European market structure has changed in an important manner during the observed period”, with a significant decrease in trading volumes observed after 2021 attributed to Brexit. The drop in trading volumes was accompanied by four other main changes.

The first was a decrease in the number of infrastructures trading shares, even though the number of these organisations remain elevated. The second, a shift in share trading distribution, in terms of both market types and countries. Third, a concentration of trading in a few EU countries and trading venues. Trades in multilateral trading facilities (MTFs), for example, were concentrated in the Netherlands, France, and Germany. Finally, the report also observes a relocation of domestic trading activities and a rise in the specialisation of trading venues.