EFAMA, EPTA (European Principal Traders Association) and Admantia, part of consulting firm Protiviti, have jointly signed a letter urging consideration of further adjustments to the EU’s Consolidated Tape Provider proposals – after feedback from association members pointed to a date gap surrounding EU shares and ETF tape.
The letter also urges consideration of their proposed amends in context of the ongoing consultation around the Savings and Investment Union.
“Based on extensive deliberations and feedback from our members, as part of the ongoing Savings and Investments Union consultations, we have identified key gaps in the current policy and implementation framework of the EU Shares and ETF tape. To overcome these challenges, we are submitting new recommendations for the attention of the European Commission, ESMA, data contributors, and the future Consolidated Tape Provider,” the joint letter states.
In a linked press release, the troika state: “A well-functioning tape will help investors make better-informed decisions, tying in with the goals of the Savings and Investment Union (SIU).”
It notes the new recommendations include:
- Expand the depth of pre-trade quotes to include 5 layers of prices and volumes, which would allow the tape’s users to gain richer insights into supply and demand, enable better execution decisions, tighter spreads, and growth of secondary markets.
- Identify the venue on pre-trade data to increase user confidence and trust, improve order routing and best execution, reduce information asymmetry, enhance competition, and provide visibility for smaller venues together with accountability for larger venues.
- Include ETCs (Exchange-Traded Commodities) and ETNs (Exchange-Traded Notes) on the tape, as they trade on the same venues as ETFs and excluding them risks fragmenting the market data landscape and increasing complexity.
- Encourage smaller venues (which have the option to opt out) to contribute data, which would lead to more visibility around their niche liquidity pools, local investor bases, or unique order types not visible on larger venues.
- Secure a robust governance framework for the tape, which includes representatives from the data user community in the main decision-making bodies, especially in key areas such as pricing, data content, latency and access.
“Policymakers have the opportunity to address these areas in the upcoming SIU legislative package.”
These latest recommendations come in addition to EFAMA’s previous statements regarding pricing, Reasonable Commercial Basis and venue attribution, published in January 2024.
EFAMA commented then that: “The pricing of the tape will also be a key determinant of its success in a market for data that lacks price competition, and where we observe a general decline of interest in European equities. Strengthening the Reasonable Commercial Basis (RCB) for data provision will mitigate against that.”
At the time, in January 2024, Tanguy van de Werve, director general at EFAMA, commented: “With the legislative review now behind us, we look forward to a healthy contest to choose the best providers for the bond and equities tapes. Consolidated European data in the two asset classes has long been lacking and will fill a major need for both domestic and foreign investors.”
