By Phoebe Seers and Charlie Conchie
LONDON (Reuters) -Britain’s Financial Conduct Authority (FCA) said on Wednesday its equities trade tape detailing pre- and post-trade data will be operational by 2027, as it launched a consultation on the design and scope of the regime.
The regulator’s “consolidated tape” is intended to give investors and companies a clearer view of liquidity across UK equity markets and support listings. The FCA has proposed including post-trade data and attributed best bid and offer prices from multiple UK trading venues.
In its consultation paper, the FCA said a more comprehensive view of trading would help combat the perception that British markets are more illiquid than their international peers and allow firms to make more informed decisions when listing.
A consolidated tape would “support the attractiveness of the UK as a listing destination, by providing a more accessible view of total UK equity market liquidity for issuers and investors”, the FCA said.
A lack of perceived liquidity on the London Stock Exchange has been held up as one of the reasons for an exodus of companies away from the market and a dearth of IPOs in recent years.
After two years of operation, the regulator said it will review the effectiveness of the tape – a term which was originally used to describe the transmission of stock prices – and consider whether to adjust the level of pre-trade data.
Simon Walls, interim executive director of markets at the FCA, said that diverse trading options in UK markets made it harder to assess liquidity as a whole.
“The tape seeks to tackle this challenge by delivering more straightforward access to equity market data from across venues,” he said.
EU PLANS TO SELECT PROVIDER BY YEAR-END
The U.S. has long operated tape aggregation for stock and bond prices, while the European Union plans to select a provider for its equities tape by year-end.
EuroCTP, a joint venture of European exchanges including Deutsche Boerse and Euronext, is the only confirmed bidder for ESMA’s tape.
The FCA has chosen a provider for its bond tape, but that rollout faces delays due to a legal challenge.
The proposals were welcomed by some in the industry.
Goldman Sachs’ Eleanor Beasley, head of market structure, said the tape would bring “long-needed transparency” and play a “meaningful role in attracting capital and driving future growth”.
London Stock Exchange Group has previously said there was no clear use case for a tape containing pre-trade data, as that information was already provided by a number of vendors.
A person familiar with the group’s thinking said that position had not changed.
(Reporting by Yadarisa Shabong in Bengaluru and Phoebe Seers in London; Editing by Anil D’Silva and Ed Osmond)
