The shift to passive investing amid growing pressure on costs and evolving regulatory expectations is an emerging concern for European traders, according to a survey published Tuesday from SIX Swiss Exchange.

Most traders are expecting the shift to passive investing to impact global markets, the survey finds; 88% of traders surveyed have seen a shift from active to passive investing, and that 72% expect that to continue next year.

Traders pointed to a desire to control costs (44%), and regulatory reform (namely the planned implementation of the MiFID II rules in January 2018), cited by 31%, as the primary drivers of the shift toward more passive investing.

The survey finds that 85% of traders see the shift provoking change in the world’s financial markets, and only 40% say that the change is likely to be positive for their companies. Indeed, 44% of traders surveyed say there there’s a risk to price formation if the shift to passive strategies continues as expected.

According to the survey, regulations, such as MiFID II, will be by far the biggest challenge in the next 12 months.

Another issue identified by traders is the perceived lack of liquidity in global markets, which was cited by 74% of traders. Liquidity is seen as a bigger issue in the fixed income sector than the equities sector; and, only 3% saw a lack of liquidity as an issue for the ETF sector.

“Our survey results show the rise of passive investment is set to continue, but there are concerns about what this may mean for global markets. At the same time, there are plenty of other challenges for traders on the horizon — the biggest being regulation coming into effect in 2018,” says Tony Shaw, director of SIX Swiss Exchange’s London, U.K., office.

Despite these challenges, the survey finds traders remain optimistic about their employment prospects, with 61% saying that their company will employ about the same, or more, people in three years’ time. That’s up from 48% in the previous survey.

The survey was conducted between Oct. 26 and Nov. 8 with 185 respondents across Europe, of which 61% traded in shares, 14% in fixed income, 13% in structured products, and 12% in ETFs/ETPs or other products.