There are just seven months to go before the selection process for the EU equity consolidated tape provider (CTP) begins, and another contender has just entered the race.
Aquis Exchange and Cboe Markets are together bidding to be the EU equity CTP, establishing Netherlands-based SimpliCT to develop a competitive product. The companies will be equal shareholders in the new venture, with the assignment of resources from both companies and an industry advisory committee to be determined later on.
The concept of a consolidated tape for European equities was first floated 15 years ago, and has since been a part of the Markets in Financial Instruments Directive (MiFID), the Markets in Financial Instruments Regulation (MiFIR) and the Capital Markets Union (CMU). ESMA intends to select an equity CTP by the end of 2025. If SimpliCT is successful in its bid, Aquis and Cboe will both contribute to its operations.
“The only declared competitor at this point is EuroCTP, whose shareholders were ferociously opposed to the introduction of a CT,” Natan Tiefenbrun, president of North American and European equities at Cboe Global Markets, told Global Trading. “Whilst EuroCTP now insists on their neutrality, it’s an unusual dynamic if shareholders in a business think they would be better served by its limited success, or indeed even possibly its failure.”
On this point, Eglantine Desautel, CEO of EuroCTP, told Global Trading that “the board members are purposefully not involved in the market data business or how the tape is designed. EuroCTP’s Board oversees the management and business performance of the company only. Our advisory committee, which includes industry, academia and associations, will ensure that the tape takes into account all the interests and needs of the different stakeholder groups in the definition of the tape’s services.”
Tiefenbrun argues that the favourable CT opinions of those behind SimpliCT will put it ahead of the competition. “Shareholders have been consistently passionate advocates for the benefits the consolidated tape can bring to the European marketplace – a widely adopted, affordable tape that simplifies market data licensing and gives investors that pan-European view. We have a vision for the tape which is aligned to the vision of policymakers,” he said.
Desautel is “looking forward to learning more about competitor solutions as they develop”, she told Global Trading, adding that “we welcome competition because competing applications bring a healthy dynamic to the tender process. Not only does competition push each applicant to prepare the best possible offering, but it also draws attention to the process, highlighting the importance of a consolidated tape in Europe.”
A European Commission expert stakeholder group recently responded to ESMA’s proposed regulatory technical standards for the CTP, stating that its recommendations were insufficient. Data, trade reporting and publications standards need further development, it argued, with consistency and accuracy remaining key concerns.
Tiefenbrun suggested that Cboe and Aquis’s familiarity with operating pan-European businesses will be to their advantage: “I think we’re well qualified as a result of our success and experience. SimpliCT would inherit these characteristics from us.” Additionally, “Cboe operates the largest Approved Publication Arrangement (APA) for the reporting of off-exchange equity trading activity. So in that context, we’re already regulated by ESMA under the same rules that would apply to the CT.”
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