Top Themes Heading into 2026: Market Structure, Liquidity and Regulations

Looking back while heading into 2026, several themes have stirred discussion across the trading landscape and industry panels. From the rise of hosted pools in ATSs to the evolution of Treasury market structure, bilateral liquidity has been a recurring theme in our blogs last year.

In US equities, there has been intense interest in market structure changes impacting brokers and institutional traders. With the redefinition of round lots and odd-lots, pending changes to market data via the SIP, and the potential for altering the Order Protection Rule (OPR) under Reg NMS, this could be a year of structural change and technological innovation.

Below we revisit the most consequential topics that dominated FlexTrade’s blogs this year, while anticipating how they could evolve in 2026,

Hosted Pools within ATSs

One of the hottest topics in 2025 was the emergence of hosted pools – or private rooms in alternative trading systems (ATSs) – offered to the buy side. In The Buy Side Seeks Liquidity in Hosted Pools, industry experts explain that hosted pools allow broker-dealers to segment their order flow and control which counterparties they invite to participate.

Rather than building single-dealer platforms, brokers can create hosted pools within existing ATSs that already connect to buy-side order and execution management systems.

A broker, who is the ATS subscriber, can control the trading environment whether internalizing customer orders or choosing different order types, such at the midpoint based on the national best bid or offer (NBBO), or conditional or firm, pegs or limit, market, or VWAP.

But questions have been raised about transparency into hosted pools, since it is not clear how many private rooms exist on ATSs and how much volume is traded in them. ATSs provide written descriptions of their order types including hosted pools on their Form ATS-N, available on the SEC’s web site.

On its web site, IntelligentCross, the No. 1 ATS for tier-one NMS stocks, disclosed that Hosted Pools accounted for only 7% of its total volume in Q32005 while 93% was executed via all-to-all trading on the ATS.

From the buy-side’s perspective, the focus is liquidity and best execution. “The engagement with a market maker is  easier to measure, and in a bilateral interaction, market makers can give a better price,”  said one global head of trading at a Tabb Forum event.

What’s ahead: Hosted pools will continue to grow as they gain interest from institutions and retail brokers, though debate may continue.

Bilateral Liquidity Goes Multi-Asset Class

Another trend that gained traction last year is bilateral trading. While bilateral trading has been a feature of the foreign exchange market, it has increased adoption in European equities under MiFID II’s systematic internalizer (SI) regime.

Now there are signs that bilateral trading is expanding to fixed income in rates trading and in corporate credit where ELPs have begun to stream executable prices directly to the buy side through EMSs.

In Bilateral Trading Finds Momentum Across Multiple Asset Classes, several buy-side head traders conveyed that having market makers stream quotes into an EMS order pad, would improve efficiency and reduce the potential for information leakage.

While emphasizing that bilateral trading in fixed income is complementary to the existing market structure of intermediary venues, one head of global trading suggested the introduction of more direct connectivity in fixed income could decentralize trading through an EMS model.

Some predicted the buy side will soon see streaming quotes in US Treasuries citing the market’s price transparency, and more limited set of  instruments for dealers to stream. Having prices pushed directly to the buy side – rather than relying on request-for-quote or  RFQ – could mean better prices and less market impact.

One fixed-income expert asserted that bilateral trading is at “the take-off point,” after multiple cycles of upgraded tech stacks and increased OMS/EMS connectivity between the buy and sell sides.

This shift is also occurring through the ongoing electronification of the US rates market and the demand for automation and efficient execution within the buy side’s workflow. For decades, US rates trading has been split between the dealer-to-dealer (D2D) pools and the  dealer-to-customer (D2C) pools. Now, non-bank liquidity providers and single dealer platforms are using their own application programming interfaces (APIs) to stream prices directly into EMSs, blurring the lines between D2D and D2C pools. See US Treasury Market Evolves with Wholesale Venues, Bilateral Pricing and EMSs.

What’s ahead: Expect more bilateral trading in fixed income over the next 18-24 months as connectivity to ELPs matures.

US Equity Market Structure:  Round Lots, Odd Lots vs. Delays in Tick Size and Access Fees

On November 3, US stock exchanges and market data vendors implemented a major change: redefining round-lot sizes and updating the securities information processors (SIPs) to disseminate size in shares.

Instead of a fixed round-lot size of 100 shares, the SEC  shifted to a system based on stock prices: 100 shares, 40 shares, 10 shares, or 1 share. The tiered system recognizes that retail investors cannot afford to trade 100 shares of higher-priced stocks – such as Alphabet, Netflix, and Meta Platforms.

The changes are meant to increase transparency into odd lots for retail investors and create more of a level playing field t with institutional customers. One of the biggest impacts will be narrower spreads for expensive stocks where prices for less than 100 shares were never displayed before, and now will be displayed in smaller quantities.

Yet the changes only affect stocks above $250 a share, impacting about 200 names, while 4,700 remain unchanged.

In May of 2026, the SIPs will add odd-lot quote information to core data, including the odd-lot bids and offers that are priced at or better than the NBBO to the consolidated tape. Retail investors – who mainly trade in odd-lot size – will finally get visibility into odd-lot quotes. See Round-Lots, Odd-Lots Push Forward, while SEC Delays Tick-Size and Access Fees.

However, these changes could be the tip of the iceberg. The SEC has delayed the compliance deadline for Regulation NMS tick-size and access-fees rules for one year – until November 2026.

What’s ahead: With the implementation of SIP reforms moving forward, the SEC could table the decision on tick-size and access fees until it decides on the Order Protection Rule.

The Order Protection Rule under Fire

Few subjects triggered more debate in 2025 than the SEC reconsidering the Order Protection Rule or Rule 611 under Regulation NMS, which could reshape equity market structure and overhaul order-routing practices.

Designed to protect against trade-throughs, OPR prevents exchanges (and brokers) from executing a trade at a price inferior to a better priced, immediately available, automated quotation, displayed on another exchange.

Supporters argue that it serves as backstop for best execution for retail investors. Critics blame it for causing venue proliferation, fragmentation, high connectivity, and data costs as it requires brokers to connect to each new exchange, even with one or two percent market share.

There is consensus that something will happen to OPR, partly because SEC Chair Paul Atkins voted against the rule 20 years ago. Another reason is that the rule is problematic for bringing crypto exchanges into the SEC framework. The SEC is preparing for the tokenization of U.S. equities which trade in real time on the blockchain.

Speaking at the STA market structure conference on the panel Retail Investing: New Tools, New Rules, one leading retail brokerage execution said his firm was “for the recission of 611 because it  believed there should be competition driving the marketplace and not regulatory restrictions.” See The Order Protection Rule: Is an Equity Market Structure Shake-Up Ahead?

However, not everyone wants OPR to go away and some worry  about the unintended consequences of tweaking OPR with its interconnected rules.

At STA, market participants suggested potential remedies, such as changing the market data revenue allocation formula, imposing volume thresholds, and lifting the ban on locked-and-crossed markets. The SEC also needs to decide what it wants to do with tick sizes and access fees.

The year ended with uncertainty about the future of OPR. In December, the SEC held a second roundtable at the University of Austin to get further feedback on how potential changes to Reg NMS could impact market data, such as the NBBO,  and best execution.

What’s ahead: According to an SEC official, the regulator expects to file a proposal in 2026 on OPR and its associated rules.