Guest Contributor: Steve Grob, Fidessa
Seems like equity and other capital marketplaces are going through the ying and yang of fragmentation and consolidation. Just as we hear about another merger, we read about another new venue going live or more regulation encouraging competition. This provides market participants with a problem, especially in terms of understanding the execution quality they are enjoying and in knowing which venues are must-haves (and which ones can safely be ignored for now).
In Europe, the lack of a consolidated tape has emerged as a universal and justifiable gripe amongst the buy-side community. As well as making it difficult for them to understand how good their execution quality really is, it also makes it difficult to accurately value their investments. The sell-side, too, wants to be able to prove its bona fides in terms of best-ex and, of course, venues of all shapes and sizes want to demonstrate their relevance to different segments of the trading community.
None of this is lost on the European regulators but, the question remains, what are we all going to do in the meantime whilst the regulators and the industry work to solve the problem? How will we get any independent view as to whether any particular execution was best, good enough, or simply inadequate?