On January 3, branded "MiFID II day" by market watchers, stock trading proceeded smoothly despite the regulatory changes.
But important shifts still to come into force, including a cap on dark pool trading in certain stocks, may cause changes to the overall market structure in the next months.
Dark pool trading essentially takes place on private exchanges not open to the general investor.
The amount of trading on lit order books - loosely defined as venues where trading prices and participants are publicly recorded - rose from 28.4 billion euros on Jan 2 to 36.4 billion euros on MiFID day, according to Thomson Reuters Market Share Reporter data.
Some 43 percent of trading occurred on lit exchanges, a level in line with the past month.
The total amount traded was 87 billion euros ($105 billion), up from 75 billion on Jan 2, as traders trickled back to their desks after the festive period.
"It’s quiet overall as people are still treading carefully regarding the new regulations," a trader said, adding that the dark pool caps would be the next catalyst.
Rob Boardman, CEO of trading platform ITG, said the real impact would be seen in the next few months.
"(The first day was) just about making sure that the systems are working and implementing all the toys you have built to work in a compliant way," he said.
"In the next few months I am hoping that we will move on to a bit more of a creative phase."
The most impactful change still to come is a cap imposed by the European Securities and Markets Authority (ESMA) on some stocks traded in dark pools, which is designed to push trades back onto lit markets.
The so-called "double volume" cap will require dark pools to suspend trading in stocks for which, on average, more than 8 percent of daily shares traded were transacted in the dark over the past 12 months.
ESMA will publish the list of stocks for suspension on Jan 9 and this would apply from Jan 12, an ESMA spokesman said.
By ITG’s analysis, between 70 and 80 percent of the FTSE 100 stocks will be capped, and nearly as much of the FTSE 250.
In European equities, Boardman said it would not surprise him if half the stocks in the Eurostoxx 50 index were capped.
"I don’t think [the cap] will impact share prices, but it could impact liquidity," he said. "Some traders might have fewer tools at their disposal for those who want to hide their trading intentions."
($1 = 0.8289 euros)
(Reporting by Helen Reid, Editing by Jeremy Gaunt.)
By Helen Reid
