Systematic internalisers (SIs), private trading venues run by investment banks and market makers, led a major shift in European equity trading during the first half of 2025, growing an impressive 46% year-on-year, according to the latest European Securities and Markets Authority (ESMA) trends risks and vulnerabilities (TRV) report.

The SI boom far outpaced the overall 26% increase in equity trading volumes compared with the previous six months, which pushed total market turnover to a record €2.1 trillion in March.

In contrast, other trading venues barely moved. Over-the-counter (OTC) trading slipped slightly, losing 1.4% of its relative share, while traditional “lit” exchanges, the public markets where prices are visible to all, posted only a modest 0.6% gain. Dark pools, private venues where large investors can buy and sell shares without immediately revealing their orders to the wider market, where roughly 8–9% of equities traded during the period. As for periodic auctions, special trading windows that open for a very short time that gather orders and then execute them all at once at a single price, remained flat — accounting for about 2–3% of activity.

“Competition for order flow has never been more intense across Europe’s equity markets,” said Mark Montgomery, Chief Commercial Officer at capital markets analytics firm big xyt.

“The rapid rise of SIs reflects how modern equity trading is adapting to liquidity needs. Financial institutions are increasingly looking for customised execution and price improvement opportunities that systematic internalisers can provide. The challenge now falls to traditional exchanges to compete not only on cost but also on innovation, speed, and transparency.”

He added that the growth of off-exchange trading will require close attention. “Maintaining a fair and resilient market structure demands that all participants keep pace with this shift, particularly in periods of unpredictability, when transparency and reliability matter most.”

Source: big xyt