Liquidity providers dominate the UK electronic continuous markets with 77% of the flow, leaving just 23% made up of "natural order flow" from hedge funds and retail and institutional investors. When taking over-the-counter trading into account, HFT still accounts for 35% of the total turnover.

Tabb also claims that only 65% of turnover in the UK is actually meaningful and executable liquidity, with 35% consisting of "noise," or reprints of already-conducted trades.

OTC turnover accounts for 45% of the market, less than a quarter of which is executable. The balance is comprised of reprints of already-traded turnover with 72% of executable liquidity being traded on the lit order book of an exchange or MTF.

The study also shows that EUR1.3 trillion of the UK turnover is CFD-related, representing 31% of total equity turnover, or half of the executable market.

Will Rhode, research analyst, Tabb, says that "the UK equity market is not nearly as deep as it may have at first appeared once you extract non-executable liquidity, or noise, and high-frequency trading from the picture."

High-frequency trading is coming under scrutiny from the European Commission as part of a widespread overhaul of MiFID and has also attracted the attention of US authorities.