According to a Cisco study on global exchanges, there are at least 50 different capabilities that an exchange needs to be a total star performer. The study focuses on the top ten factors that exchanges are measured on and surprisingly low-latency is a number five. "Without a doubt, liquidity is the most important capability that an exchange can have," says Peter Robin, senior director of Cisco's Internet Business Solutions Group (IBSG), whose team interviewed 40 senior executives at 30 buy and sell side organizations as well as hedge funds and the top 10 global exchanges. Even though customers continue to press exchanges to lower their costs, Cisco found that the cost of transactions is only around 4 percent of the cost to the members or institutions. Here are a few charts that dive right into the stats and rankings.

Proliferation of Dark Liquidity Pools

Not only are the global exchanges competing with each other, they are competing with broker dealers that have launched alternative trading venues (ATSs) and crossing networks. In this first chart, the study lists 30 ATSs or dark liquidity pools that are operating in the U.S. and Europe.

But since this study was conducted in 2007, the Tabb Group has identified 55 venues for trading U.S. equities, notes the Cisco study. ATSs are proliferating because most of the "major investment banks have their own internalization and /or crossing engines, which siphon executions directly from the exchanges," says Robin in an interview with Wall Street & Technology. "The members still resent the fact that the exchanges' profit is made from them. I think that is one of the greatest imperatives that the members have had in requesting the services of ATSs," says Cisco's Robin.

Regulations like Reg NMS and MiFID are driving the entrance of aggressive new competitors. "They're able to set up trading facilities not too dissimilar to what the big exchanges offer but at reduced cost," says Robin. For instance, Nomura's Instinet owned Chi-X Europe has been trading 10 percent of the London Stock Exchange volume, while ECN BATS Trading, which has applied to the SEC for exchange status, has captured 11.3 percent of Nasdaq and 8 percent of NYSE volume, cited the report. Going forward, exchanges will set up their own dark pools, just as the LSE is doing that with Lehman Brothers, predicts Robin.

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