The platforms allow them to find a buyer without showing their hand to the wider market to avoid profiteers gaming the system to make an extra buck. It’s good business for investment bankers, who pocket the difference between the bid and asking prices.
Trading on these “dark” platforms doubled to 10 percent from 2022 to 2025. Exchanges, which fear their lunch is being eaten as the share of stock trading taking place on public exchanges fell from 39 percent to 26 percent over the same period of time, want Europe’s politicians to do more to force trading out of banks’ private systems and back onto the “light” of their own public platforms.
“Someone will still have to explain to me why the biggest banks on this planet have completely different rules to execute the same business,” Deutsche Boerse’s chief of staff, Niels Brab, told POLITICO.
Banks, meanwhile, argue that systematic internalizers bring more business to Europe. “I don’t think that anybody who has got a market share of 10 percent should be seen on any market structure as jeopardizing the functioning of the market,” said Adam Farkas, chief executive of the Association for Financial Markets in Europe, which lobbies for investment banks on both sides of the Atlantic.
“If you want to increase liquidity, you want to attract players and investors in. That would be my argument. If you let two teams on the pitch to play football, and you want to enjoy a good game, you don’t want to tie the hands and the feet of one during the game,” he added.
One battle after another
The latest battle comes less than two years after the warring camps reached a deal on the structure of a public stream of information on share prices in the EU, intended to provide a clearer picture of where trading is taking place.