WFE Warns Bilateral Trading Growth Threatens Europe's Stock Market Price Discovery

According to its latest response to ESMA's market structure consultation, the World Federation of Exchanges warned that bilateral trading growth in European equities risks weakening price discovery mechanisms. Data cited by WFE shows bilateral trading increased from 25% to 35% of European share trading volume between 2020 and 2025, while primary exchange trading declined from 38% to 30% over the same period. WFE's core concern: bilateral trades rely on prices formed by lit public markets rather than generating transparent prices themselves. If this migration continues, confidence in public market valuations could erode, potentially making Europe's markets less attractive for companies seeking capital.
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