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7 Competition & Reg. Network Indus. 535 (2006)
Catching up with Technology - The Impact of Regulatory Changes on ECNs/MTFs and the Trading Venue Landscape in Europe

handle is hein.journals/netwin7 and id is 535 raw text is: CATCHING UP WITH TECHNOLOGY -
THE IMPACT OF REGULATORY CHANGES
ON ECNs/MTFs AND THE TRADING
VENUE LANDSCAPE IN EUROPE
PETER GOMBER* and MARKUs GSELL**

Abstract
With RegNMS in the US and MiFID in the EU, regulators respond to recent years'
changes in trading concepts and infrastructures. Both try to catch up with tech-
nological advances and intend to create a level playing field between the different
types of trading venues and a harmonisation in the order execution process. The
paper illustrates and analyses the regulatory environments and the impact of their
upcoming changes on ECNs and MTFs with a specific focus on Europe. Scenarios
will be developed on how the regulatory overhauls will alter the competitive land-
scape between Regulated Markets, ECNs/MTFs and order flow internalising enti-
ties.
Keywords: regulation, MiFID, RegNMS, ECN, MTF
1. INTRODUCTION
Recent technological improvements and competitive market dynamics transformed
the landscape of trading venues and led to the establishment of new execution concepts
and infrastructures along the securities trading value chain. Competition among exe-
cution venues intensified as more and more exchanges changed their organisational
structure in recent years. They became listed companies, easing mergers and acquisi-
tions among themselves and other players in the value chain. The higher awareness
Chair of Business Administration, especially e-Finance, Goethe-University, P.O. Box 11 19 32, D-
60054 Frankfurt/Main, Germany, +49-69-798-23092.
Research Assistant at the Chair of Business Administration, especially e-Finance, Goethe-Univer-
sity, P.O. Box 11 19 32, D-60054 Frankfurt/Main, Germany. We thankfully acknowledge the sup-
port the E-Finance Lab, Universities Frankfurt/Main and Darmstadt, for this work.

Competition and Regulation in Network Industries, Volume 1 (2006), No. 4

535

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