Meet Your Market Maker: Understanding ELP SI Liquidity

The implementation of MiFID II in 2018 introduced significant change on Europe’s equity venue landscape, with one of the most intriguing developments being the emergence of systematic internalisers (SIs) run by electronic liquidity providers (ELPs). The growth of ELP SIs is arguably representative of the broader shift of order flow origination from traditional banks to electronic market-makers. The notion of ELPs being able to provide liquidity directly to clients would have been unlikely just a few years ago given levels of buy-side anxiety around such firms. However, the SI regime offers the buy-side a unique opportunity to analyse liquidity from each ELP and use them more or less accordingly.

This TABB Group report, Meet Your Market Maker: Understanding ELP SI Liquidity, looks at some of the statistics and volumes available for this market, as well as how the ELP SIs are differentiating themselves from one another to prove their worth. We also consider the future prospects for the market.