A group of European exchanges today confirmed their joint venture to create a consolidated tape for equities in Europe, with a new company created that will develop a comprehensive view of the European equity market through the creation of a consolidated tape (CT). Although the legislative process is not yet finalised, a spokesperson gave BEST EXECUTION insight into their future plans.
The joint venture, first announced in February, was set up with leading European stock exchanges including Deutsche Boerse, Nasdaq and SIX, as well as multiple smaller players across Europe. The chairperson of the new company is Jorge Yzaguirre Scharfhausen, director of BME (Spanish Stock Exchange), acquired in 2020 by SIX Swiss Exchange.
Bernard Holsboer, group finance director of Euronext, is acting as the group’s interim CEO while the firm decides on a final appointment. BEST EXECUTION can also reveal that other board members include Frank Hoba (Deutsche Boerse); Emilie Rieupeyroux (nominated by Euronext, in the process to be formally appointed); Nikolaj Kosakewitsch (Nasdaq); Matthias Szabo (Vienna Stock Exchange); Manyu Moravenov (Bulgarian Stock Exchange), on behalf of: Bourse de Luxembourg; Budapesti Ertektozsde; Zartköruen Muködo Reszvenytarsasag; Bulgarian Stock Exchange; Bursa De Valori Bucuresti S.A.; Giełda Papierów Wartościowych w Warszawie S.A.; Hellenic Exchanges – Athens Stock Exchange S.A.; Ljubljanska Borza, D.D.; Malta Stock Exchange PLC; Zagrebačka Burza D.D.
A consolidated tape in Europe has been one of the more controversial elements of the ongoing Mifid II review, with market participants holding often divergent views about how it should be structured and managed. While the Swedish presidency of the EU Council managed to get its proposal over the line before Spain took over on 1 July, agreeing to establish EU-level consolidated tapes with market data from all trading platforms to be included, the details are still being hashed out – and not everyone is happy with the direction of travel.
Read more: Down to the wire – Sweden slides Mifid II agreement over the line, but at what cost?
“Our focus remains on ensuring the legislation – still under negotiation – will mandate a consolidated tape that meets the needs of consumers, including essential information from intraday and closing auction phases, priced to succeed, and fairly rewarding all data contributors,” stressed Natan Tiefenbrun, president of Cboe Europe, in a statement to BEST EXECUTION.
“Only a tape with these characteristics will lower barriers to participation and support competition and growth in European equity markets. We continue to see members of the exchange consortium pushing in the opposite direction.”
EuroCTP, which is currently in the process of seeking a CTO, confirmed to BEST EXECUTION that it would be bidding for the equities consolidated tape once the legislation was ratified, which could be by the end of this year.
“The initiative that has led to the creation of EuroCTP is a true representation of European capital markets and shows a broader range of interests than any other consolidated tape proposal, its aim is to strengthen the EU Capital Market Union,” said chair Yzaguirre Scharfhausen in a statement. “We are proud to be the first European consolidated tape initiative for equities and ETFs to have established a company.”
It is not the only player in the game, with a consortium of institutions including Barclays, BlackRock, Credit Agricole, Societe Generale and UniCredit throwing their own hats into the ring back in April. But the exchange venture might have bigger ambitions than currently stated.
“We have a competitive RFP running….but negotiations are still ongoing,” said a spokesperson. “As the legislative process is still ongoing it is not possible to predict when the tender process will start and at what time the CT has to be provided. As EuroCTP our aim is to be ready to provide a CT in compliance with the EU regulation when the public tender starts.”
Interestingly though, given that a fixed income tape is also firmly on the cards (and, many feel, more urgently needed), EuroCPT has not ruled out a dual bid.
“The focus of the CTP is on equities, initially. However, we may consider other options as well in case feasible and sensible, and once the regulation has been finalised,” said the spokesperson.
Entering the tender for a fixed income consolidated tape would put the consortium in direct competition with other bidders – notably the joint venture launched by MarketAxess, TradeWeb and Bloomberg in May 2023 with the stated goal of becoming the fixed income consolidated tape provider for Europe.
At the time of publication the joint venture (led by Neil Ryan of Finbourne Technology) had not responded to a request for comment.
©Markets Media Europe 2023
