Governance and Organization of Trading Venues: The Role of Financial Market Infrastructure Groups


The scenario of trading venues has undergone significant reforms and transformation over the last twenty years. Particularly in the European Union, through integration — at a firm level — and consolidation — at a geographical level — traditional financial exchanges have developed into pan-European and global financial market infrastructure (FMI) groups. However, European financial regulation has not kept the pace with these market developments. Despite more than 70% of market transactions being handled by infrastructural groups, the regulatory approach is overly siloed, creating a separate set of regulations for trading and post-trading entities and services. This paper questions whether and to what extent FMI groups may (i) affect competition in the trade and post-trade industry and (ii) pose systemic stability threats because of their structural role in providing a primary service for the smooth functioning of the financial markets.