This report evaluates the challenges and opportunities that fragmentation presents for MTFs, market data aggregators and smart order routing vendors since the inception of MiFID. Despite firms adopting the directive’s principles, many challenges remain. The basic expectations of MiFID such as client classification and trade transparency have been satisfied. However, there is still a huge challenge for businesses to meet Best Execution. Market data aggregation and Smart Order Routing still need time to meet the needs of the market. We have reached base camp but we still have a long way to go before we scale the mountain. The battle is not just one of cost or technology; it is innovation in richer functionality that will define the winners and their ability to reach the critical mass of liquidity required for survival.

This report is the first and most comprehensive study of end-to-end trading latency across numerous asset classes. Using real-world tests in the trading environments of top-tier investment banks, we have discovered that the majority of latency is generated within the banks' own applications. The 26-page research report tries to dispel some of the myths surrounding latency, as well as providing the grounds for a scientific approach to its measurement and containment. Actual latency requirements for staying competitive are provided across the equities, fixed income, listed derivatives and forex lines of business. The third part of the report concentrates on latency measurements, the meaning of the figures, as well as a panorama of the tools and products available.Finally, the research provides a summary of the various strategies used to reduce latency across the applications, middleware and network layers.