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Equity Trading Systems in Europe - A survey of recent changes

Author

Listed:
  • FOUCAULT, Thierry
  • DEMARCHI, Marianne

    (SBF, Bourse de Paris)

Abstract

This paper provides a survey of recent changes in the market microstructure of the 5 largest European Stock Exchanges. We first provide a brief statistical overview of European equity markets. Then we discuss how the introduction of the Investment Services Directive and the development of institutional trading have prompted European Stock Exchanges to modify their trading systems since 1994. We show that these exchanges have converged to a similar market organization. In this organization, trading takes place in an order-driven market but trading rules can vary according to the type of securities. We also describe the remaining differences between the trading systems, in particular with respect to the consolidation of the order flow and transparency.

Suggested Citation

  • FOUCAULT, Thierry & DEMARCHI, Marianne, 1998. "Equity Trading Systems in Europe - A survey of recent changes," Les Cahiers de Recherche 663, HEC Paris.
  • Handle: RePEc:ebg:heccah:0663
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    References listed on IDEAS

    as
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    Citations

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    Cited by:

    1. Dirk Schiereck & Christian Voigt, 2010. "With or without you: market quality of floor trading when screen trading closes early," Review of Quantitative Finance and Accounting, Springer, vol. 34(2), pages 179-197, February.
    2. Ranaldo, Angelo, 2004. "Order aggressiveness in limit order book markets," Journal of Financial Markets, Elsevier, vol. 7(1), pages 53-74, January.

    More about this item

    Keywords

    trading systems; trading rules; market microstructure; European equity markets;

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading

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