Stocks in emerging markets on average tend to be tougher and more expensive to trade in and out of due to regulatory barriers, lower trading volumes relative to stocks in the United States, Japan and Europe, and currency fluctuations.

While commissions that institutional investors have to pay to trade emerging stocks remain higher than those in developed markets, the premium shrank to 43 percent in 2016 compared with 56 percent in 2015, according to Greenwich associates, a market structure consultancy.

The rising popularity of exchange-traded funds (ETFs) could be one reason for the narrowing premiums, Greenwich said.

"This trend suggests that emerging markets are becoming more accessible for equity traders, which could be a result of the ETF boom," said William Llamas, Associate Director at Greenwich Associates.

ETFs have allowed both institutional and retail investors the opportunity to invest in emerging markets, where size and access barriers previously existed, the firm added.

Overall, average commission rates to trade U.S. stocks through a traditional broking firm were about 12 basis points and 14.9 basis points in Europe in 2016. The comparable rate for emerging market stocks was 22.3 basis points, Greenwich said.

(Reporting by Vikram Subhedar)