Trading visibility, or the lack of it, is one of the ETF industry's biggest challenges. With over-the-counter (OTC) trading on the rise in Europe, the true depth of liquidity is increasingly hidden, dampening confidence among investors and hindering asset growth.
With MiFID II expected to address non-reporting of OTC trades and efforts underway to aggregate European trading data, a solution is in sight, but will undoubtedly be a complex and lengthy process. As OTC trading continues to dominate an increasingly fragmented market, solving the transparency problem will only grow in importance. According to BlackRock, between 2010 and 2011, European reported OTC trading rocketed nearly 500%, representing a growing proportion of total volume (30% in 2011 versus 7% in 2010). The OTC market, however, is notoriously opaque and experts estimate only a thir...
To continue reading this article...
Join Professional Adviser for free
- Unlimited access to real-time news, industry insights and market intelligence
- Stay ahead of the curve with spotlights on emerging trends and technologies
- Receive breaking news stories straight to your inbox in the daily newsletters
- Make smart business decisions with the latest developments in regulation, investing retirement and protection
- Members-only access to the editor’s weekly Friday commentary
- Be the first to hear about our events and awards programmes