The Diversion of Order Flow on French Stocks from CAC to SEAQ International: a Field Study

The competition between SEAQ International and Continental European equity markets to attract transactions in the most actively traded European stocks has intensified since the late 1980s. Because their transactions are organised in a different manner, and because reporting standards are not the same, comparisons of official transaction volumes from SEAQ International and the French CAC market system are misleading. The objective of this paper is to scrutinise the order flow for French stocks and the reporting procedures on both market systems, so as to ascertain the effective transactions on each market and estimate actual market shares. Based on both the observation of official statistics and a field study of order flows conducted among five large and active brokerage houses with a book on both markets, SEAQI's market share in French stocks as reported in previous studies using only official volume statistics seems largely overstated.