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Question of the Week - Feb 23rd 2016

How has the distribution of commission rates changed over time in Europe?

 

Chart 1:  UK percent of volume within each commission bucket (2009 – 2015Q3)  

 

Chart 2:  Europe ex-UK (EURO Countries only) percent of volume within each commission bucket (2009 – 2015Q3)  

  • While our data do not explicitly capture the commission type, we see a shift in the distribution that likely reflects a move away from full service commission rates to execution only and low touch rates. This shift has been in motion for the past 6 years. Depending on the outcome of ongoing discussions by regulatory bodies in Europe related to the use of dealing commissions to pay for research, the shift may continue or even accelerate.
  • In the UK, buckets below 5 basis points and above 15 basis points show significant change over the years. Volume in the 0 to 5 bps bucket increased from 23% in 2009 to 41% in 2015; above 15 bps decreased from 26% in 2009 to 15% in 2015.
  • Euro countries showed a similar shift. Volume in the bucket below 5 bps increased from 30% in 2009 to 46% in 2015; above 15 bps decreased from 30% in 2009 to 13% in 2015.
  • Volume in commission rate buckets between 5 and 15 bps is reasonably steady.”

 

Refer to ITG Peer Analytics for information on available ITG Peer Group Database based analytics.

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