Since the enactment of the Markets in Financial Instruments Directive (MiFID) in Europe on 1 November 2007, European equity markets have undergone significant change. The Directive has acted as a catalyst for evolution, resulting in a proliferation of new trading platforms to compete with the incumbent exchanges. However, greater competition has created a number of challenges for market participants, as liquidity fragments across trading venues.

This study explores the impact of fragmentation on market microstructure, focusing on issues such as transparency, costs, and price formation. The findings are drawn from a CFA Institute membership survey and from empirical analysis. The report offers policy considerations on the basis of the findings, which, among others, focus on measures to improve transparency and access to market prices.