The cost of share trading has risen in some European markets despite new laws aimed at boosting competition, as brokers split orders into ever smaller chunks, according to new research. The findings help explain the "growing popularity" of dark pools, which enable traders to avoid the expense of breaking up large orders.

According to research by consultancy Oxera, on behalf of the European Commission, the cost per share trade fell across Europe between 2006 and 2008 thanks to increased competition from trading systems such as Chi-X Europe. For instance, the cost of UK trades fell by half over the period, while German trade costs dropped 36% and French trades 18%.