big xyt: Navigating fragmented markets

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July 2, 2025

Navigating fragmented markets: the importance of independent TCA in enhancing execution outcomes

By Mark Montgomery, CCO, big xyt

In today’s increasingly fragmented and complex market landscape, buy-side trading desks face the dual pressure of achieving execution quality and maintaining regulatory compliance, all while navigating complex liquidity environments. Traditional transaction cost analysis (TCA), often reliant on broker reports and static benchmarks, is no longer sufficient to meet the demands of today’s execution landscape.

Market participants are instead turning towards independent, high-precision analytics that offer a more granular view of market behaviour – supporting not just regulatory mandates, but more informed trading decisions.

Fragmentation and Complexity: Structural Challenges for the Buy-Side

Modern equity markets operate across a broad spectrum of venues including lit exchanges, dark pools, systematic internalisers and periodic auctions. Each presents unique characteristics in terms of liquidity access, price discovery and transparency. This dispersion has introduced new layers of complexity into execution workflows, particularly for buy-side firms aiming to minimise slippage and market impact while accessing sufficient liquidity.

The reliance on broker-provided TCA poses a risk in such an environment. Without a neutral, data-driven benchmark, it becomes difficult to assess whether execution strategies are achieving their intended outcomes or simply aligning with broker capabilities. Independent analytics offer an alternative lens – helping to validate execution quality and inform future trading behaviour based on actual market conditions.

Market Volume by Trade Category

Why Independence Matters

The value of independent TCA lies in its ability to remove conflicts of interest from the measurement process. An analytics provider that does not participate in trading or route flow is better positioned to offer objective insights into how orders are executed, where slippage occurs, and whether broker routing decisions align with client performance goals.

This independence becomes particularly important in multi-broker environments where assessing comparative performance is critical. It allows trading desks to ask more rigorous questions about venue selection, liquidity access and execution timing – questions that may not be answered fully by internal or broker-led reporting.

Broker Performance

The Importance of Data Transparency and Quality

Data transparency is foundational to effective TCA. Access to raw tick data – particularly Level 3 order book information – enables a detailed reconstruction of the market environment at the time of execution. This level of granularity supports analysis not just of price outcomes but of market dynamics around each trade.

Order Book Replay

Robust data quality controls are equally essential. With the sheer volume of global trading activity, systematic cleaning, validation and normalisation processes are needed to ensure consistency across venues. Independent analytics platforms that integrate these capabilities reduce the operational burden on trading desks and support more accurate, comparable metrics.

From Compliance to Continuous Improvement

TCA remains a central component of regulatory frameworks like MiFID II, which require firms to demonstrate best execution. However, the role of TCA is expanding beyond compliance. Increasingly, it is being used to inform strategic questions: Are participation rates optimised for current liquidity conditions? Which venues are most suitable for different order types? How do execution outcomes vary across time-of-day or volatility regimes?

When aligned with these goals, analytics become a tool for continuous improvement. They help identify areas for strategy adjustment and provide the evidence needed to justify tactical changes, such as altering venue preferences or rebalancing between aggressive and passive execution styles.

Real-Time and Intraday Insights

While many TCA processes operate on a T+1 basis, real-time analytics are playing a growing role – particularly for desks managing high-touch or algorithmic strategies. Intraday visibility into order execution, liquidity fragmentation and off-book trading patterns enables quicker decision-making and proactive risk management.

Volume and Volatility (Historical vs. Intraday)

This is particularly relevant in volatile market conditions where trade-offs between immediacy and market impact shift rapidly. Intraday alerts on unusual trading patterns or liquidity imbalances can inform whether to pause or adjust execution strategies mid-session.

Data Science and Adaptive Models

Execution analytics is also evolving with the integration of advanced data science techniques. Machine learning and clustering algorithms can segment securities not just by sector or size, but by shared trading behaviours, such as spread dynamics, turnover patterns or typical market impact curves. This allows for more targeted strategy development and a move away from overly broad classifications that may not reflect trading realities.

Adaptive models are especially useful in markets where historical relationships can break down quickly, as was observed during recent episodes of extreme volatility or structural shifts in liquidity provision.

Flexibility in Access and Integration

Buy-side firms differ significantly in how they structure their trading and analytics functions. Some may require dashboard visualisations for pre-trade planning, while others embed TCA directly into their OMS or EMS workflows. Others, particularly quantitative teams, prioritise access to raw data and APIs for deeper, customised analysis.

A flexible architecture that accommodates these varied needs – through API endpoints, file delivery options or browser-based tools – can support a more integrated approach to execution analysis. It also reduces reliance on internal infrastructure, which can be costly to build and maintain, especially when handling large-scale tick data.

A Broader View of Execution Performance

Execution quality is multi-dimensional. It encompasses cost, timing, market impact and relative performance against benchmarks. As buy-side firms look to balance these factors across increasingly diverse market conditions, independent TCA plays a key role in maintaining discipline and visibility.

By grounding execution decisions in data rather than anecdote, firms can foster a more accountable and performance-oriented trading culture. This not only helps meet regulatory expectations but also supports better outcomes for investors over time.

Looking Ahead

As trading markets continue to fragment and technology continues to evolve, the need for robust, transparent execution analytics will only grow. For the buy-side, this means prioritising solutions that offer independence, data quality and analytical depth – while remaining agile enough to adapt to new trading behaviours and regulatory pressures.

Independent TCA is no longer a luxury – it’s a necessary component of a modern execution strategy. By embedding it into daily workflows and decision-making processes, firms can gain a clearer understanding of market mechanics, improve execution outcomes and stay ahead in a competitive and complex trading environment.

TCA Portal

Best Execution by Venue

Single Order TCA Report from Order List

Euronext-Athens’ deal gets cautious welcome from analysts

By

Etienne Mercuriali

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July 2, 2025

European bourse consolidation shows no sign of slowing: Euronext has proposed a €399 million all-share takeover of Hellenic Exchanges-Athens Stock Exchange. Shareholders might have expected more fixed income, low volume business growth with the “innovate 2027 plans”.

Michael Sanderson, analyst at Barclays, estimates it will only bring low value to the group.
He said in a note published 2 July: “Assuming that negotiations are completed and any transaction is concluded in 2026, based on Bloomberg consensus for Athex future earnings we estimate accretion would be lower than 2% on full year 2028 estimate base.” But added that Euronext track record at integrating cash market exchange acquisition means that “This type of market consolidation should be well received by shareholders, even if the accretion is only very limited”.

Hubert Lam, and Christian Holstein, analysts at Bank of America agreed: “ENX has a strong track-record of achieving synergy targets; it achieved 130% and 115% of initial targets in the Irish and Oslo Bors acquisitions, respectively”

Market participants might have expected more focus following the launch of the “Innovate for growth 2027” in November 2024. Euronext had said: “Our strategy relies on three priorities: (i) accelerate growth in non-volume business, (ii) expand the FICC1 trading and clearing franchise and (iii) build upon our leadership in trading” but had also stressed that they would continue to “execute external growth opportunities, in line with its investment criteria.”

Euronext said it is in talks with the Athex board about buying up to 100 per cent of the Greek market operator but stressed that any formal bid will depend on due diligence and regulatory clearances. Euronext’s indicative terms offer Athex investors 21.029 of their shares for one new Euronext share, implying a price of €6.90 and valuing the bourse at about €399 million based on Euronext’s €145.10 close on 30 June.

Deutsche Bank is advising Euronext on the deal, Athex declined to comment.

“There can be no certainty, at this stage, that this would result in any agreement or transaction,” the exchange operator cautioned, adding that a deal would “deliver on Euronext’s ambition to consolidate European capital markets with growth and synergy opportunities.”

Athens would become Euronext’s ninth exchange with a combined market value over €6 trillion and giving the group, which already handles roughly a quarter of all lit cash-equity trading in Europe, a foothold in the south-eastern corner of the Euro zone.

The potential acquisition comes as Greek stocks and bonds have been outperforming the benchmark. Athex composite is up about 13 per cent this year after a near-40 per cent surge in 2024. In 2024 Greek bond spreads over equivalent bunds traded below that of French bonds, quite the reversal from the European crisis of the early 2010s. Volume on the Athens lit market is averaging €3 billion a month this year as per BMLL data.

Euronext carries on its consolidation strategy: It bought the Irish Stock Exchange for €137 million in 2018, Oslo Børs VPS in 2019 and Italy’s Borsa Italiana for €4.4 billion in 2021, while rival SIX has just absorbed Aquis to bolster its own pan-European footprint.

No Danish Compromise for BNP Paribas

By

Lucy Carter

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July 2, 2025

Sandro Pierri, CEO, BNP Paribas Asset Management

BNP Paribas has finalised its acquisition of AXA Investment Managers (AXA IM) and clarified its leadership structure going forward.

The firm has not been able to employ the ‘Danish Compromise’, under which banks do not have to deduct the value of insurance subsidies from their capital. In May, the ECB stated that this would not be applicable to asset management undertakings.

BNP Paribas has estimated that its common equity tier 1 (CET 1) ratio will fall by approximately 35 basis points as of Q3 2025 following the acquisition, adding that “discussions with supervisory authorities are still ongoing.”

Sandro Pierri, CEO of BNP Paribas AM, is now also CEO of AXA IM. Marco Morelli, formerly executive chairman of AXA IM, is now a chairman of both companies.

The pair report to Renaud Dumora, deputy chief operating officer, head of investment and protection services, and chairman of BNP Paribas Cardif.

On the announcement, Dumora said, “Morelli and Pierri will spearhead the integration process of BNP Paribas’ asset management activities to form, with all teams, a European industrial platform, leader in traditional and alternative asset management and leader in insurance management. I have every confidence in their ability to make this industrial project a success.”

BNP Paribas now holds more than €1.5 trillion in assets under management across Europe.

ESMA opts for leniency in T+1 roadmap

By

Lucy Carter

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July 1, 2025

Giovanni Sabatini, independent chair, EU T+1 Industry Committee

The European Securities and Markets Authority (ESMA) has released its high-level roadmap for T+1 settlement, identifying 51 recommended actions as high priority and angling for securities financing transactions (SFTs) CSDR penalty exemptions.

The authority specifies that adherence to the standard operational timetable it outlines is “strongly encouraged” rather than legally required. However, it stresses that not harmonising with the standard could cause financial detriment to other market participants.

A proposal to amend Article 5(2) of CSDR, making SFTs executed on trading venues exempt from T+1 settlement obligations and temporarily suspending cash penalties, was published by the European Commission in February. A political agreement on this was reached on 18 June, after calls for clarification by market participants.

Cash penalties are enforced under CSDR if a settlement fails, and are intended as a deterrent. The scope of the penalty is determined by the asset type, liquidity of the financial instrument, type of transaction and the duration of the fail.

Daniel Carpenter, CEO of Meritsoft, a Cognizant company, argues, “while the cash penalties can serve to incentivise firms to be ready for October 2027, it can also adversely affect a trader’s ability to source liquidity if counterparties believe the penalty of a trade fail is too costly. CSDR penalties are costing the industry around €70m a month [per Firebrand Research] and could well increase under T+1 timelines, especially as the EU moves to reinvigorate its capital markets through the Savings and Investment Union.”

Currently, CSDR penalty exemptions apply if the underlying cause of the fail is not attributable to the transaction participants or is attributed to operations that are not considered trading, for transactions where the failing participant is a central counterparty (unless the CCP does not interpose itself between the counterparties in a transaction) or when insolvency proceedings have been opened against the failing participant.

In the US, penalties for late settlements have not been imposed under T+1.

Francisco Béjar, head of CSD at SIX, commented, “CSDR penalties [have] the potential to add significant extra cost if moving to shorter settlements increases the volume of trade fails in the EU. We will be working closely with market participants to ensure they are ready and deliver high trade settlement rates so this step isn’t necessary. But it’s a sensible backup option if the market needs this.”

Carpenter added, “the possibility of suspending CSDR cash penalties during the transition to T+1 signals that EU officials are concerned about the likely increase in settlement fails as the markets adjust to the new settlement timeframe,” argues

ESMA has also called for changes to its guidelines on standardised procedures and messaging protocols under CSDR. Following its consultation paper on the amendments, the authority plans to submit draft amendments to CSDR in Q1 2026. Final guidelines are expected to be published in Q3 2026.

Elsewhere, acknowledging that divergence in settlement cycles across asset classes and geographies could cause liquidity management, performance and regulatory compliance issues for investment managers, the roadmap advises that there should be no penalties where moving to a T+2 cycle is not possible for investment funds.

The majority of investment funds currently settle on a T+3 or T+4 basis, ESMA states. While subscription and redemption should be reduced to T+2 where possible, the authority notes that this reduction may not be a practical change before the T+1 go-live.

Further minimising penalties for investment managers, ESMA states that regulatory clarification should be introduced to ensure that cash breaches caused by settlement misalignment are categorised as passive and non-reportable.

Giovanni Sabatini, independent chair of the EU T+1 Industry Committee, concluded, “we urge all market participants to review the recommendations, assess the impact on their systems and procedures and start planning how they want to prepare for the transition to T+1.”

One-horse European equity CTP race “flawed”, industry expert says

By

Etienne Mercuriali

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July 1, 2025

Niki Beattie, CEO, Market Structure Partners

After Big Xyt’s drop out from the EU’s consolidated tape tender, lone remaining bidder EuroCTP is a front for its exchange owners, a market structure expert says. But the provider’s CEO defends its governance and cost structure.

The European Commission’s search for an equities CTP has shrunk to a one-horse race, which is a problem according to Niki Beattie, CEO of Market Structure Partners: “If EuroCTP is the only contender, it shows the tape is deeply flawed. Exchanges have lobbied for fewer depth levels and no venue attribution, making the product unattractive to anyone who doesn’t already control the data”.

Big xyt confirmed its withdrawal on 25 June, saying it could not secure the necessary financial backing, while Aquis Exchange and Cboe Europe dropped their SimpliCT venture in January. Their exits leave EuroCTP’s 14-exchange consortium as the sole publicly announced candidate.

This outcome suits the exchanges that control EuroCTP, Beattie told Global Trading. “Clause 15 of the draft RTS even lets venues keep charging for their feeds while the tape adds another fee. That mirrors Canada, where pass-through plus consolidation charges mean hardly anyone uses the tape — users rely on partial data instead of the complete view a tape should provide. The fact the only bidder is a group of incumbent exchanges highlights a huge conflict of interest; regulators should rethink the design.”

EuroCTP chief executive Eglantine Desautel rejects the one-horse-race narrative. “We don’t assume we’re the only bidder,” she said. “We’re preparing as if this were a highly competitive tender, and ESMA will make the final choice.”

On the conflict-of-interest charge, Desautel stressed governance: “EuroCTP is a standalone entity — no HR, finance or technology functions are outsourced to our shareholder exchanges. Our capital structure is open by design and we actively welcome new investors.”
She also said she would welcome the arrival of other shareholders than the current primary exchanges one to relax the optical conflicts of interest issues raised by Beattie and other market participants.

Cost is another issue raised by Beattie. She argues stacked fees will deter users, yet Desautel insists Europe’s reasonable-commercial-basis (RCB) rules prevent that. “The tape will receive data for free, and our margins are capped by RCB, unlike in the US,” she said. ESMA’s final report on RCB caps margins for market-data products, reinforcing her point.

Desautel also disputes comparisons with Canada. “While having a non-mandated tape results in a slower and more reduced level of adoption, EuroCTP is not in favour of making the CT mandatory in the EU. In Europe the user will consume the tape because of its quality and its costs effectiveness as the incoming feed is free, margins are regulated. We have calibrated a revenue-redistribution envelope, so venues have an incentive to supply high-quality data while keeping margins reasonable.”

On the criticism that limited depth and missing venue codes will blunt usefulness, she argued for pragmatism: “Given the timeline, let us deliver what’s been agreed, gather real usage data, then give policymakers evidence for future enhancements. Our processing time allows to distribute the aggregated data less than 120milliseconds after the execution or equivalent — fast enough for the buy side’s needs.”

EuroCTP says it has held more than 300 consultations over 18 months and on 30 June announced the addition of Stephen Dorrian, Cboe Global Markets’ head of European market data and access, to its advisory committee to broaden input.

ESMA is to publish the tender results in Q4 2025 and name a provider before year-end. Potential competitors still have until 25 July to file their bids and reopen the race, unless they are already working in stealth mode.

Ex-Fidelity manager joins Goodhart Partners

By

Lucy Carter

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July 1, 2025

Richard Tennant, partner and global small cap portfolio manager, Goodhart Partners

Richard Tennant has joined boutique equity investment manager Goodhart Partners as a partner and global small cap portfolio manager.

Goodhart holds £552 million in assets under management as of 31 January 2025. Trading at the firm is led by Toby May.

In the London-based role, Tennant is launching a global small-cap fund for multibagger stocks – those providing returns over 100%.

Tennant has 20 years of experience and joins the firm from Capital Group, where he has been a European small- to mid-cap equity investment analyst since 2018.

Prior to this, he spent more than 12 years at Fidelity investments. Joining the firm as an equity analyst, he became a portfolio manager for the small/mid cap pan-European pilot fund in 2012 and for the small/mid cap pan-European manager in 2013.

Rubner swaps Goldman for Citadel Securities

By

Lucy Carter

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July 1, 2025

Scott Rubner, head of equity and equity derivatives, Citadel Securities

Citadel Securities has named Scott Rubner as head of equity and equity derivatives strategies. He is based in Miami.

According to a Citadel Securities spokesperson, the company holds 23% of US equities market share.

Rubner joins from Goldman Sachs, where he has been managing director for global equity macro, emerging markets, equity derivatives and tactical flow of funds since 2022. Prior to this, he was vice president of equity derivatives, emerging markets and macro at the company.

He began his career as a macro emerging markets derivatives sales trader at Merrill Lynch in 2005, before becoming a director of global equity derivatives and delta one sales macro execution in 2013.

Citi rejigs Japan IB team as deal flow rises

By

Lucy Carter

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July 1, 2025

Akira Kiyota and Taiji Nagasaka, co-heads of investment banking for Japan, Citi

Akira Kiyota and Taiji Nagasaka have been named co-head of investment banking for Japan at Citi, effective 1 October 2025.

The appointments follow an uptick in deal flow in the country, Citi stated, adding that it is seeking to capture more inbound and outbound opportunities.

Japan has seen strong IPO performance over the last year, with US$9 billion issued in JPY between May 2024 and April 2025 putting it in fourth place globally.

Based in Tokyo, the pair will report to Jan Metzger, head of investment banking for Japan, Asia North, Australia and Asia South, and Robert Nakamura, country officer and head of banking for Japan.

They replace Masuo Fukuda, who will continue his role as vice chair of Japan and become vice chair for Japan and Asia North investment banking.

With more than 25 years of experience, Nagasaka has been a managing director, head of investment banking product and head of equity capital markets in Japan since joining Citi in 2022. Prior to this, he was head of equity capital markets at Mizuho and director of equity capital markets at SMBC Nikko Securities.

Kiyota has 30 years of industry experience, more than 20 years of which has been spent at Nomura. Most recently, he was a senior managing director and global head of mergers and acquisitions at the company. Earlier in his career, Kiyota held roles at JP Morgan Securities and Sanwa Bank.

This Week: James Athey, Marlborough

By

GlobalTrading

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July 1, 2025

Marlborough: Bond markets zero in on Fed signals and tariff risks.

Bond markets will be closely watching employment data this week says James Athey, senior fixed income portfolio manager, at Marlborough, for any signs of labour weakness, which could push the Federal Reserve towards earlier rate cuts. The PM shares his views on the lead drivers moving markets; the impact of headline volatility on directional flow, and the looming questions over tariff risks.

In this episode, Athey also unpacks where he sees growing investor complacency; the importance of prioritising liquidity in the current trading environment, and where he sees concerns rising over shifts in private markets.

[This post was first published on Trader TV]

Liquidnet adds another Instinet alumni for its growing US equities team

By

Etienne Mercuriali

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June 30, 2025

Liquidnet has hired David Ramirez as a senior high-touch and program-trading specialist within its US Equities group.

Ramirez joined 12 May after four and a half years as an executive director on Instinet’s High-Touch desk and previously held senior sales-trading roles at Wolfe Research, FBR, Dahlman Rose, and Susquehanna.

His arrival follows two earlier 2025 Instinet veteran hires: Mark Turner, who became co-head of equities sales & trading for the Americas in February, and Hillary Budds, appointed head of US crossing in April. Together, the trio strengthens Liquidnet’s block-trading, high-touch and program-trading capabilities as the agency broker expands its US equities franchise.

Liquidnet, owned by TP ICAP, has recently acquired Neptune and reported results up 16% in the latest TP ICAP quarterly update. It generated $354 million of revenues in 2024.
Read more: Exclusive: Redefining credit markets – Neptune Networks and Liquidnet

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Navigating fragmented markets: the importance of independent TCA in enhancing execution outcomes

Fragmentation and Complexity: Structural Challenges for the Buy-Side

Why Independence Matters

The Importance of Data Transparency and Quality

From Compliance to Continuous Improvement

Real-Time and Intraday Insights

Data Science and Adaptive Models

Flexibility in Access and Integration

A Broader View of Execution Performance

Looking Ahead

European bourse consolidation shows no sign of slowing: Euronext has proposed a €399 million all-share takeover of Hellenic Exchanges-Athens Stock Exchange. Shareholders might have expected more fixed income, low volume business growth with the “innovate 2027 plans”.

BNP Paribas has finalised its acquisition of AXA Investment Managers (AXA IM) and clarified its leadership structure going forward.

The European Securities and Markets Authority (ESMA) has released its high-level roadmap for T+1 settlement, identifying 51 recommended actions as high priority and angling for securities financing transactions (SFTs) CSDR penalty exemptions.

After Big Xyt’s drop out from the EU’s consolidated tape tender, lone remaining bidder EuroCTP is a front for its exchange owners, a market structure expert says. But the provider’s CEO defends its governance and cost structure.

Richard Tennant has joined boutique equity investment manager Goodhart Partners as a partner and global small cap portfolio manager.

Citadel Securities has named Scott Rubner as head of equity and equity derivatives strategies. He is based in Miami.

Akira Kiyota and Taiji Nagasaka have been named co-head of investment banking for Japan at Citi, effective 1 October 2025.

Marlborough: Bond markets zero in on Fed signals and tariff risks.

Liquidnet has hired David Ramirez as a senior high-touch and program-trading specialist within its US Equities group.

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