ESMA corrects SI bond ranking to place BNP Paribas as second in Europe

Dan Barnes

The European Securities and Markets Authority (ESMA) has republished its ESMA Annual Statistical Report, now stating that the largest systematic internalisers (SIs) for bond trading volume in 2019 were Barclays (€6.7 trillion), BNP Paribas (€2.2 trillion), SEB (€1.6 trillion) and Royal Bank of Scotland (€1.2 trillion).

The report is an analysis of trading activity in equity and non-equity instruments in Europe. It found significant fragmentation of trading for most bonds across trading venues and systematic internalisers (SIs); using the Herfindahl–Hirschman Index (HHI) as a proxy for market concentration, on a scale where ‘0’ is concentrated and ‘1’ is fragmented, corporate and government bonds measured 0.94, ‘other’ types, such as convertible bonds, measured 0.95 and covered bonds measured 0.88; covered bonds are typically a feature of specific geographical markets.

Over-the-counter trading accounted for €50.4 trillion of bond trading by volume, the 102 SIs in the European Economic Area (EEA) accounted for €26.1 trillion of traded volume, the 94 multilateral trading facilities (MTFs) for approximately 15% and the 30 organised trading facilities (OTFs) for closer to 10%.

When originally published, ESMA had mistakenly included interdealer broker BGC, which runs an OTF, as an SI, putting it in second place behind Barclays, a place now taken by BNP Paribas.

With nearly €6.7 trillion traded in 2019, Barclays SI was Europe’s biggest venue followed by Bloomberg Trading Facility, Tradeweb, MarketAxess and BGC’s OTF. BNP Paribas’s SI traded closer to €2 trillion over the year.

BGC was the largest OTF, while MTS’s EBM ran the largest regulated market and the fourth largest MTF.

©The DESK 2020