Optiver Wrote the 'Neutral' Fix for European Markets. Three of Its Five Ideas Would Also Enrich Optiver.
Optiver holds an SI license, sits on EPTA's governing board, and shares a clearing coalition with a rival CCP the paper never discloses.
Optiver’s June 2026 paper on European market structure reads like neutral policy analysis: five technocratic fixes to stop the decline of lit continuous trading, each grounded in ESMA’s own data. Read against who benefits, the same five fixes form a coherent competitive-positioning document for systematic internalisers — the exact business Optiver itself runs. That doesn’t make the underlying facts wrong. It does mean the facts need to be checked against primary sources rather than taken as neutral, and at least one of them — the retail-venue evidence — is a 2022 study of a practice that stayed partly legal in the EU until 21 days after this paper was published, a timing gap the paper doesn’t flag.
The paper and the trend it describes
On June 9, 2026, Optiver — a Dutch market maker and, since 2025, a licensed systematic internaliser (”SI,” meaning a firm that fills client orders using its own capital and balance sheet rather than matching two outside counterparties) — published Building stronger European equity markets, a five-point reform package aimed at the EU’s Market Integration and Supervision Package (MISP), the Commission’s package of proposals published December 4, 2025. ECON’s three rapporteurs published draft amendment reports on June 12, 2026; other committee members may table further amendments by July 16, 2026, and ECON intends to vote on its negotiating position at its December 1, 2026 meeting — the actual near-term legislative timeline, which is a committee vote on a negotiating mandate, not a final agreement. The paper’s factual foundation is ESMA’s April 30, 2026 Call for Evidence on the market structure of European equity markets, a data-driven study of 2022–2025 MiFIR transaction reporting that both sides of the debate cite as ground truth.
ESMA’s own numbers confirm the trend: lit continuous trading — order books where displayed buy and sell quotes trade against each other continuously, setting the reference price everyone else free-rides on — fell from an average 84% to 78% of transaction count between 2022 and 2025, while overall on-book trading (continuous books plus auctions) held at “around 75-80%” of turnover and addressable liquidity (trading genuinely open to any counterparty, not internal or technical bookings) stayed roughly stable at 85-90%, per ESMA’s Call for Evidence, paragraphs 21 and 38. Optiver’s quarterly figures for the two channels absorbing the shift both check out: non-intragroup SI trading grew “from 5.1% in Q1 2022 to 10% in Q4 2025,” a verbatim match to ESMA’s paragraph 34, and frequent batch auctions (FBAs, ultra-short automated auctions lasting milliseconds) reached “7.9% in Q4 2025,” matching ESMA’s paragraph on FBAs doubling their turnover share in three years. ESMA’s prose gives period averages; Optiver’s gives quarter-end figures, which run higher if the trend is still accelerating into Q4 2025 — a measurement-convention difference, not a contradiction.
ESMA’s own report frames this as a live dispute, not a settled question. It names two competing outside studies directly: Oliver Wyman’s “The Liquidity Matrix,” commissioned by the Federation of European Securities Exchanges (FESE) in July 2025, which frames intra-market fragmentation as a threat to price discovery and capital-raising; and Goldman Sachs and New Financial’s October 2025 report, which argues that focusing on the lit primary market captures barely 30% of real trading activity and that European markets are, in the round, working well. This is the consensus a reader needs before assessing Optiver’s paper: the exchange lobby (FESE) says fragmentation is a crisis; a bank that itself supplied over €1 trillion of principal liquidity in 2024 says the crisis is a mirage. Both are talking their own book. Optiver’s paper does something more interesting than either — it accepts the lit-decline premise (siding with the exchanges’ diagnosis) while locating the blame and the fix somewhere that benefits neither the exchanges nor the banks, but market makers like itself.
Reading the five proposals by who gains
Optiver’s own paper discloses, in its second section, exactly what kind of firm is writing it: “at Optiver, when we transact via our SI, the resulting risk is managed passively... We believe this model... is how a well-functioning risk-taking SI should operate.” That sentence is the interpretive key to the rest of the document. Run each of the five proposals through it:
Proposal 1 (midpoint pricing for lit venues) asks regulators to extend to exchanges a permission SIs already have. Optiver is an SI. If exchanges get midpoint flexibility, Optiver’s SI stops holding an exclusive advantage over exchanges on this dimension — but nothing here would remove the SI’s advantage over other SIs or over single-market-maker venues (proposal 5’s target). This is a genuine give-back to competitors, not a pure self-benefit, and it is the one proposal where Optiver’s paper is arguing against its own narrowest interest.
Proposal 3 (compulsory intragroup flagging) would make post-trade data cleaner for everyone. But it specifically benefits independent SIs like Optiver relative to bank-affiliated SIs and exchange groups that route large volumes of internal, group-affiliated flow — the flagging gap Optiver describes inflates the appearance of competitive bilateral liquidity that is actually captive. ESMA’s own Call for Evidence, in its section on addressable liquidity (paragraphs 122-123), independently arrives at the same conclusion — intragroup SI trades “do not seem to qualify as addressable liquidity” — and asks stakeholders directly, in Q44, whether a new RTS 1 flag should be created. Optiver’s ask here tracks ESMA’s own emerging thinking; it is not solely self-serving, but it does help precisely the kind of firm Optiver is.
Proposal 4 (full clearing interoperability) would let any trading firm pick its own central counterparty (CCP — the institution that steps between buyer and seller and guarantees settlement) rather than defaulting to the CCP owned by the exchange group it trades on. Optiver benefits directly: full interoperability removes the fixed cost of maintaining separate clearing relationships per venue and lets it compete for flow at venues currently locked to a vertically integrated incumbent. Optiver isn’t alone in pushing this — a July 2026 joint letter from the European Banking Federation, AFME, Cboe, EFAMA, and EPTA (EBF’s release lists the CCP signatory simply as “Cboe”; it is Cboe Clear Europe) calls for the identical mandate inside MISP. Every signatory has a direct commercial stake: Cboe Clear Europe is a rival CCP that stands to gain market share, and it already reports 95% access to European equities trading but only 73% of that flow under full interoperability today, 22% still under the weaker “preferred” model. EPTA represents exactly the class of firm — independent principal traders — that gains most from breaking vertically integrated clearing monopolies.
Proposal 2 (consolidated-tape venue attribution and depth) asks that the forthcoming EuroCTP consolidated tape attribute trades to venues with more granular depth-of-book detail than a flat, top-of-book-only feed. This is a smaller and more technical beneficiary claim than proposals 1, 3, or 4, but it still has a beneficiary: as one of a handful of large SIs that already account for a concentrated share of non-lit turnover (see below), Optiver gains when its own liquidity contribution is visible and creditable in the consolidated record in a way a flatter, less granular tape would not capture — a real interest, though a modest one relative to the other four asks.
Proposal 3, continued (MMT as the compulsory flagging standard): Optiver’s paper states “EPTA has called for compulsory MMT adoption” as supporting evidence. EPTA’s own membership page, published by the FIA, lists Optiver VOF as a current member alongside Citadel Securities, Jane Street, Susquehanna, Virtu, and fifteen other principal trading firms (twenty members in total). Optiver is citing its own trade association’s position as third-party corroboration without disclosing the membership — and the tie is closer than membership alone: Lotte de Vos, Optiver’s Head of European Market Structure, was elected to FIA EPTA’s eight-member voting Executive Committee on June 16, 2025, the body that sets EPTA’s policy positions, including the MMT position cited here. This is not evidence the underlying MMT proposal is wrong — voluntary flags genuinely have had weak uptake, a fact independent of who is asking for a fix — but it is evidence that “the industry agrees” and “Optiver agrees” are, in this instance, closer to the same sentence than the paper lets on.
Proposal 5 (ban single-firm exclusivity on retail venues) is the one built on the shakiest and most dated evidentiary base, addressed on its own below, because it is also the proposal where Optiver has the least direct commercial stake and the strongest case — which makes the sourcing problem worth fixing rather than dismissing.
The retail-venue evidence is real, and it is four years stale
Optiver’s paper supports proposal 5 with two regulator studies: “the AFM found that at two of these so-called single market-maker venues... between 72% and 83% of retail orders were executed at worse prices than the reference price, at an average cost of up to 11 basis points per trade. The CNMV found that 86% of trades at a comparable venue were executed outside the contemporaneous price range of the ten most liquid competitive venues.”
Both figures check out against the primary documents. The AFM’s March 2022 paper reports “PFOF trading venue X” at 68.8-72.0% worse executions (4.8bps average deterioration) and “PFOF trading venue Y” at 81.5-83.3% worse (11.5bps) — both described as having “one market maker acting as the counterparty for nearly all retail client orders in shares.” Optiver’s “72% and 83%” is the pair measured against Euronext Amsterdam specifically, and “up to 11 basis points” rounds down slightly from 11.5bps — a minor, immaterial imprecision. The CNMV’s March 2022 companion study reports 86.4% of trades as “worse execution,” an average deterioration of €1.09 per €1,000 — Optiver’s “86%... approximately €1 per €1,000” matches that directly.
What the paper doesn’t say: both studies measure 2021 data, published February-March 2022, and every venue in both is explicitly a “PFOF trading venue” — the broker was paid by the market maker to route retail orders there. That practice isn’t a live policy question anymore. Article 39a of the revised MiFIR bans an investment firm from receiving “any fee, commission or non-monetary benefit from any third party” for routing retail or opt-in-professional orders to a venue, permitting a transitional exemption only “until 30 June 2026.” Germany was the sole member state using it; once that window closed, PFOF became illegal EU-wide — June 30, 2026, 21 days after Optiver published this paper. The arrangement that generated the AFM and CNMV’s worst-execution numbers is now illegal across the bloc, though the ban post-dates rather than precedes Optiver’s analysis.
This is where the paper’s argument needs to be read carefully rather than dismissed. Optiver is not asking MISP to ban PFOF — that has already happened. It is asking MISP to address something distinct: venue rulebooks that grant one firm exclusive liquidity-provision rights regardless of whether a payment changes hands, “in some cases... written into venue rules,” which the paper correctly notes makes a venue “legally classified as open, multilateral” while “operat[ing] like a bilateral venue in practice.” The AFM and CNMV studies measured venues that happened to combine both features — single-dealer structure and PFOF payment — because in 2021 those two things nearly always went together. The ban removes the payment. It does not, on its own, remove the exclusivity clause in the rulebook, and neither the AFM nor the CNMV has published updated execution-quality data isolating the structural effect (single dealer) from the payment effect (PFOF) after the ban. Optiver’s proposal 5 is a genuine, falsifiable empirical claim — that a single-dealer venue will keep producing worse retail prices even with no payment attached — resting on quantitative evidence that predates the one intervention (the PFOF ban) a skeptical regulator would point to as already having solved the problem. The paper would be measurably stronger, and more honest about its own limits, if it said so.
This is also not a new argument Optiver assembled for the MISP moment. Optiver made substantially the same point in its own March 24, 2025 paper — over a year before the June 2026 paper, and before the PFOF ban had even taken effect — warning that “ahead of the upcoming PFOF ban, some firms are introducing new structures that directly link single market-maker venues with affiliated brokers,” concluding that these post-ban structures “offer even less competition for retail order flow than their predecessors” because the affiliated market maker “no longer even has to pay for retail order flow, but may still get to execute it on highly preferential or exclusive terms.” That earlier paper cites the same AFM and CNMV studies used in the June 2026 paper, which undercuts any reading of proposal 5 as manufactured for this specific legislative window, though it does not supply a newer quantitative dataset either.
Separately, live 2026 evidence — not from Optiver, outside either regulator’s 2021-22 sample — corroborates the structural mechanism, if not the execution-quality numbers. Scalable Capital’s own European Investor Exchange (EIX), a post-ban venue the broker co-founded, “technically has two market makers,” but its own rulebook states: “the Management assigns each security to one of the authorized market makers for quoting purposes” — one per instrument in practice. The independent analysis documenting this argues the resulting “closed-loop” structure, where the broker now keeps the full spread rather than a partial PFOF kickback, may leave the conflict of interest worse, not better, after the ban — real, current, named confirmation that the structure proposal 5 targets exists post-ban, though only a qualitative, one-venue illustration, not a replacement for updated execution-quality data, which still doesn’t exist for any post-ban venue.
The cap-failure history is accurate, and the cap regime has already moved on
Optiver’s paper leans on the double volume cap (DVC) — MiFID II’s original mechanism for limiting dark trading under the reference-price waiver, first applied in March 2018 — as its proof that “caps have been tried, they did not work”: each time the cap suspended dark trading in a stock, activity reappeared elsewhere, mostly in frequent batch auctions, rather than returning to lit continuous books. That history is accurate. What the paper does not mention is that the DVC no longer exists in the form it describes: the 2024 MiFIR review replaced it with a single volume cap (SVC), effective October 2025 — one EU-wide 7% ceiling, replacing the old two-tier per-venue-and-EU-wide system, with the same three-month suspension if breached. ESMA itself says it “will continue to monitor the developments in the market... from a double volume cap to a single volume cap.”
That matters for weighing the “caps don’t work” argument: it’s a historical pattern observed under a specific, now-retired mechanism, not a timeless law, and the SVC’s single EU-wide threshold is a genuinely different design from the old dual cap that produced more numerous, more gameable suspension events. Whether the same migration-to-FBA pattern repeats under the SVC is an open question ESMA is actively collecting data on, not a settled precedent. Using the DVC’s 2018-2023 record to forecast the SVC’s behavior from October 2025 onward extrapolates across a regime change the paper doesn’t flag.
Why the SI-share edge exists, and where it runs into a ceiling
None of the above explains why non-intragroup SI trading could grow the way it did — from 5.1% to 10.0% of turnover in three years, doubling — or why that growth is likely to run into a natural limit rather than continuing indefinitely. Both questions matter more to a trading desk than the lobbying story, because they determine whether “more flow moves to SIs” is a trend worth positioning around or one already close to exhausted.
The mechanism is two-sided. On the regulatory side, ESMA’s own Call for Evidence, paragraph 77 states the 2024 MiFIR review’s SI-only midpoint permission “might have redirected certain trading flows from trading venues to SIs” — a real, ESMA-acknowledged regulatory subsidy toward the SI channel that has nothing to do with SIs offering better fundamental execution and everything to do with a tick-size rule applying unevenly. On the demand side, institutions with orders larger than the size displayed at the best price genuinely need a counterparty willing to commit capital at one price rather than walking the book — the second form of “invisible” price improvement Optiver’s paper describes, where an SI fills 5,000 shares at the best price instead of forcing the investor to pay up through five price levels to complete the order.
Both of those growth drivers point to their own limits. The regulatory driver is the more fragile one: it should erode substantially, though probably not disappear entirely, the moment proposal 1 succeeds and lit venues get the same midpoint permission — meaning a mechanism that has been feeding Optiver’s SI volume for two years is one Optiver’s own paper is asking regulators to switch off. It would not disappear completely because other, price-independent reasons to route to an SI would remain even after midpoint parity: established counterparty and credit relationships, KYC/onboarding requirements that make switching venues costly, and the information-leakage protection a bilateral SI fill offers relative to displaying an order on a lit book. That is still a genuine, checkable prediction: if MISP grants venues midpoint parity, non-intragroup SI growth should flatten or partially reverse in the following data — not necessarily vanish outright — decoupled from any change in genuine investor demand for committed-capital execution.
The demand-side driver is bounded differently — by concentration and by price-discovery mechanics academic research has already mapped. ESMA’s own SI data shows the growth is not broad-based: “five (ten) SIs concentrate 50% (80%) of turnover and 59% (83%) of number of trades in 2025,” per the Call for Evidence’s section 4.3 — “SI trading is growing” is largely a statement about how much balance sheet a handful of large market makers will commit, not a diffuse shift, and that capacity is itself constrained by how much single-name risk those firms will warehouse before their own risk limits bind. A body of market-microstructure research converges on the same structural conclusion. Zhu’s model, an NBER working paper (2011 draft, published 2014 in the Review of Financial Studies) finds that “adding a dark pool tends to concentrate payoff-relevant information onto the exchange and, under natural conditions, improves price discovery” — but only under those conditions. Ye (2016), extending Zhu’s framework, shows the sorting logic reverses when information is noisy: “when information precision is low... the majority of informed traders... prefer a dark pool... impairing price discovery in the exchange.” And Foley and Putniņš’s natural-experiment study of Canada and Australia’s dark-trading restrictions, published in the Journal of Financial Economics (2016), finds dark limit order markets generally help market quality, while dark midpoint-crossing systems help only conditionally — a CMCRC summary describes the midpoint-crossing finding as “the existence of a ‘tipping point’ beyond which dark trading is detrimental,” language not in the paper’s own abstract but consistent with its design and its authors’ framing that the tipping point “is likely to differ between markets.” Together these support a directional, not numerical, conclusion: off-lit execution depends on lit venues producing a reliable reference price, so migration away from lit trading can’t run to 100% without undermining the signal the SI and auction channels price off. No source here gives a universal percentage threshold, and the precise European tipping point isn’t independently observable from public data — but the direction holds: this is a self-limiting mechanism, not “SIs are simply better and will keep taking share.”
The obvious objection, and why it only partly holds
A sophisticated reader’s response to all of the above is: so what if Optiver benefits — does that make the analysis wrong? No, and it shouldn’t be read that way. Proposals 1 through 4 rest on facts that are independently verifiable against ESMA’s own primary data, not against Optiver’s say-so: the midpoint asymmetry between SIs and venues is confirmed in ESMA’s Call for Evidence, paragraph 77, which states in its own words that the 2024 MiFIR review’s SI-only midpoint permission “might have redirected certain trading flows from trading venues to SIs” — language Optiver quotes accurately. The RPRI price-improvement blind spot is confirmed in the same document (paragraph 91): RPRI-flagged trades “account for only a negligible portion of total turnover,” which ESMA itself flags as possibly reflecting “a data quality issue” rather than an absence of real price improvement — the exact point Optiver’s paper makes about midpoint fills not registering as “price improvement” under a narrow flag definition. Self-interest explains why Optiver chose to write about these particular facts. It does not, on the evidence gathered here, mean the facts are misstated.
But “the facts are accurate” and “the proposal is good policy” are different questions. On proposal 1: the mechanism evidence gathered above (Zhu, Ye, Foley & Putniņš) shows off-lit trading is self-limiting, but it doesn’t independently establish that midpoint parity for lit venues specifically improves outcomes — so proposal 1 stands or falls on the ESMA data (the midpoint asymmetry is real), not on a settled efficiency case. On proposal 3 (intragroup flagging): ESMA’s own Call for Evidence independently reaches the same conclusion Optiver does — intragroup trades inflate the appearance of addressable liquidity — real corroboration from a party with no stake in the outcome. On proposal 4 (clearing interoperability): the merits case is that it cuts concentration risk in a single vertically integrated CCP and lowers fixed costs for multi-venue firms, an argument that holds regardless of Cboe Clear Europe’s own stake in it — though no independent, non-industry study is cited here beyond the coalition’s own letter. Proposals 1 and 4 survive the self-interest objection on partial evidence; proposal 3 survives it more cleanly, since ESMA’s independent finding does the confirming work Optiver’s paper cannot do for itself.
Where self-interest does matter is in what the paper omits or leaves unstated: that Optiver holds an SI license and stands to gain from proposal 1’s leveling; that Optiver is a named EPTA member citing EPTA’s position as outside validation for proposal 3; that Optiver sits in the same interoperability coalition as a rival CCP with a direct market-share incentive; and that the retail-venue evidence for proposal 5 needs a “measured before the PFOF ban, structural effect not yet isolated” caveat that isn’t in the text. None of this is unusual for an industry position paper — it is unusual for a piece written in the register of neutral data analysis rather than declared lobbying, which is exactly the register Optiver’s paper adopts throughout (”this document ... does not reflect any opinion or judgement of Optiver,” per the paper’s own disclaimer).
The rapporteur’s own draft already cuts against the clean story
The clearest evidence that MISP is not simply absorbing industry’s preferred package comes from the legislative text itself — though only from one of the three parallel MISP legislative files; the other two rapporteurs’ draft positions are not assessed here. Markus Ferber’s June 12, 2026 draft report on the MISP Omnibus Regulation — the rapporteur assigned the MiFIR-facing parts of MISP, including the SI and consolidated-tape provisions Optiver’s paper addresses — proposes requiring SIs to “publish rulebooks disclosing access criteria, execution processes and fee structures,” a “mandatory minimum price improvement of one tick size over the best lit market price for SI executions, extended from retail to all orders,” and asks ESMA to assess “whether large SIs should be subject to direct supervision.” Every one of those is a new compliance burden on SIs, not a benefit, and the price-improvement proposal in particular would apply to Optiver’s own SI business a tick-size discipline closer to the one lit venues currently carry, cutting in the opposite direction from proposal 1’s ask to relax that discipline on lit venues instead. This does not resolve which reading of the paper is correct. It does show the legislative process, at this stage, is not a rubber stamp for the SI-favourable half of Optiver’s package — which is exactly the kind of test this piece’s thesis needs to survive contact with, rather than a convenient omission.
What would prove this wrong
This piece’s claim is specific enough to fail a test. It fails if: MISP’s final text adopts proposal 5 (retail-venue exclusivity) but waters down proposals 1, 3, and 4 despite their stronger coalition backing — showing the self-interested proposals were actually weaker on the merits; a post-ban AFM or CNMV follow-up finds single-market-maker venues’ execution quality converging toward multi-maker venues once PFOF payments stop, with no further intervention — falsifying the claim that the exclusivity clause, not the payment, was doing the damage; or Ferber’s SI-transparency and price-improvement proposals survive the December 1, 2026 ECON vote largely intact alongside proposals 1-4 — suggesting ECON weighs SI-favourable and SI-restrictive ideas on their merits rather than reflecting whichever lobby wrote the loudest paper. Conversely, if proposals 1, 3, and 4 pass largely as the EPTA/Optiver/Cboe coalition proposed while Ferber’s SI-restrictive burdens get stripped out and proposal 5 stalls for lack of updated evidence, that’s the strongest available confirmation that lobbying alignment, not evidentiary strength, is driving outcomes.
What to watch
Four concrete markers, all checkable on public record over the next two to three quarters. First, ECON’s July 16, 2026 deadline for further member amendments and its December 1, 2026 vote on a negotiating position — watch whether Ferber’s SI-transparency and mandatory-price-improvement language survives alongside the clearing-interoperability and consolidated-tape articles, and whether “full” interoperability survives or gets softened back toward the “preferred” model industry operates under today. Second, whether any regulator — the AFM, the CNMV, or ESMA in its own promised Q3 2026 feedback statement on the Call for Evidence — publishes post-change data: a post-PFOF-ban execution-quality follow-up (which a robust MISP process should demand before legislating on proposal 5) or evidence on whether dark and FBA volumes are migrating under the new single volume cap the way they did under the old double volume cap. Either absence is itself informative. Third, MMT v5.0’s actual adoption rate among reporting venues over the next year — Optiver’s own paper concedes the voluntary flag has seen weak uptake for years, so a Level 1 mandate is the only lever that plausibly changes that, and its presence or absence in the final text is a clean, binary test. Fourth, and most directly tradable: non-intragroup SI share of turnover in ESMA’s next transaction-reporting update, which should flatten, not merely keep compounding, if and when lit venues win midpoint parity — the cleanest test of whether the last two years of SI growth was a regulatory subsidy or a durable investor preference. A desk pricing execution venues in European names should treat continued SI-share growth after midpoint parity as evidence the demand-side driver dominates; a flattening as evidence the regulatory driver was doing most of the work.
None of this is a reason to discount Optiver’s underlying facts. It is a reason to read a market maker’s policy paper the way an analyst reads a sell-side research note on a stock the bank also makes markets in: check the numbers independently, they will very often check out, and then ask separately who benefits from the recommendation before deciding how much weight the recommendation itself deserves.
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