New entrants are building their cash equity banking operations to take advantage of recent changes in European regulations. The new participants, led by derivatives-focused interdealer-broker Icap and Barclays Capital, are focusing in particular on electronic and agency execution, instead of providing a full-service equities business including research.

Three senior cash equity traders from Citigroup, Glenn Poulter, David Knight, and Paul Corbett, this month quit to join fixed-income specialist Icap, where they will set up a cash equity business that will be primarily an agency broker. Icap has so far had limited equity research and cash equity trading, but in May it will officially open the new business.