The State of Play in European Over-the-Counter Equities Trading

Abstract

In early 2014, the European Council, the European Parliament, and the European Commission reached an agreement on MiFID II (Markets in Financial Instruments Directive) and on MiFIR (Markets in Financial Instruments Regulation). Because the new regulatory framework will significantly influence and likely reduce European over-the-counter (OTC) equities trading, our article investigates the current state of OTC trading in Europe. Therefore, we investigate OTC transaction sizes for Euro STOXX 50 constituents between January 2008 and June 2013, discuss whether and how they might have caused market impact, and give insights on how this affects the European trading landscape.