Erosion risks

• Regulatory reforms that make new venue entry easier
• Shift of issuance toward private markets (fewer IPOs)
• Competition from other European exchanges for flagship listings

Leading indicators

• Changes to MiFID/MiFIR venue regime
• Net new listings and delistings
• Listing fee compression or incentives

Counterarguments

• Large issuers can list or migrate to alternative venues (including US exchanges)
• IPO volumes are cyclical and can shrink regardless of venue strength

Erosion risks

• Fragmentation of liquidity across venues and internalisation
• Regulatory or tax changes reducing attractiveness of public markets
• Loss of flagship issuers to competing exchanges

Leading indicators

• Primary market share of European IPOs
• Equity raising volumes and secondary offerings
• Average free float and trading turnover of listed names

Counterarguments

• Issuers can multi-list; investor attention is global and not locked to one venue
• Regulated listing is only one part of the ecosystem; banks and advisers influence venue choice

Erosion risks

• Regulatory-driven fragmentation (MTFs, systematic internalisers)
• Fee compression from competition and open access
• Technology disruption (latency competition) and outages

Leading indicators

• Cash equity market share in Euronext-listed stocks
• Average daily volume (ADV) and order book depth
• Market quality metrics (spreads, outage incidents)

Counterarguments

• European equity trading is structurally fragmented; alternative venues can siphon flow in liquid names
• Internalisation by banks can reduce lit exchange volumes

Erosion risks

• Competitors match or exceed latency and reliability
• Cyber or operational incidents harming trust
• Technology commoditisation or vendorisation

Leading indicators

• Platform latency and uptime disclosures
• Member satisfaction and connectivity growth
• Incident frequency and severity

Counterarguments

• Trading technology is widely available; differentiation can be short-lived
• Members can multi-connect and route flow dynamically

Erosion risks

• Regulatory pressure on market data pricing (MiFID II or MiFIR) and possible consolidated tapes
• Customers shifting consumption to third-party aggregated feeds
• Growth of off-venue trading reducing value of venue data

Leading indicators

• Market data ARPU and per-user fees
• Regulatory consultations and rule changes on market data
• Share of trading executed off-venue vs lit markets

Counterarguments

• Large firms can use consolidated or alternative feeds for many use cases
• Regulation can cap prices and force more open access, weakening exclusivity

Erosion risks

• Standardisation and commoditisation of market data formats
• Increased use of cheaper delayed or non-real-time alternatives
• Vendor innovations that reduce integration costs

Leading indicators

• Growth in real-time vs delayed subscriptions
• Churn in professional user counts
• Mix shift toward bundled or enterprise agreements

Counterarguments

• Many consumers buy data through vendors, not directly from exchanges
• Some analytics use cases do not require venue-direct feeds

Erosion risks

• Regulatory changes enabling easier CCP entry or interoperability
• Policy-driven open access increasing competitive pressure
• Large defaults testing risk models and mutualised resources

Leading indicators

• Regulatory actions and rule changes (EMIR, MiFIR open access)
• Clearing member concentration and margin levels
• Default management drills and stress test outcomes

Counterarguments

• Open access rules can intensify CCP competition on fees
• Clients may clear at multiple CCPs to optimise margin and counterparty exposure

Erosion risks

• Fragmentation of trading across venues reduces netting benefits
• Interoperability or open access reduces vertical integration advantages
• Technology or risk management failures

Leading indicators

• Clearing volumes and open interest by product
• Average margin requirements and netting efficiency metrics
• Member onboarding or attrition

Counterarguments

• Clearing is a scale game where larger CCPs can outcompete on margin and capital efficiency
• Regulators may prefer interoperability or competition, weakening integrated models

Erosion risks

• CSDR-enabled cross-border competition increasing switching
• Harmonisation reduces local specificities advantage
• Technological shifts (tokenisation) changing settlement rails

Leading indicators

• Participant connectivity and custody or settlement volumes
• Cross-border issuance or custody flows
• Regulatory developments on settlement (CSDR, DLT regimes)

Counterarguments

• CSDR explicitly allows competition; issuers can choose non-domestic CSDs
• Technology and harmonisation may reduce the stickiness of local arrangements

Erosion risks

• Regulatory changes reducing compliance burdens
• Increased interoperability among CSDs lowering barriers
• Operational incidents reducing trust

Leading indicators

• CSDR settlement discipline regime changes
• Service-level incidents and settlement fails
• Pricing changes for custody and settlement services

Counterarguments

• Regulation can also force more openness and competition rather than protect incumbents
• Large custodians can steer activity based on price and connectivity

Erosion risks

• Rapid technology change and new entrants
• Clients choosing alternative vendors with lower cost
• Cybersecurity incidents

Leading indicators

• New client wins or renewals for technology solutions
• Product roadmap delivery (latency, features)
• Security incidents and remediation

Counterarguments

• Financial IT is highly competitive and features commoditise quickly
• Large clients can build or buy comparable systems elsewhere

Erosion risks

• Well-funded analytics competitors and point solutions
• Customers building internal tooling for spend analytics
• Low switching costs if output is standard reports

Leading indicators

• Client retention and net revenue retention in Investor Services
• User growth and product usage depth
• Competitive pricing pressure

Counterarguments

• Products are often non-exclusive and easy to trial or replace
• Buyers can multi-home research analytics across vendors