European exchanges plan consolidated tape

Feb 28th, 2023 | By | Category: ETF and Index News

A consortium of 14 securities exchanges in Europe has been formed with the intention of developing a consolidated tape for equities and ETFs listed in the region.

European exchanges plan consolidated tape for equities and ETFs

A group of 14 European exchanges have agreed to work together to develop a consolidated tape for equities and ETFs listed in the region.

The group comprises major players such as Deutsche Börse, Euronext, SIX Swiss Exchange, and Nasdaq, as well as smaller exchange operators including Athens Stock Exchange, Bucharest Stock Exchange, Budapest Stock Exchange, Bulgarian Stock Exchange, Cyprus Stock Exchange, Luxembourg Stock Exchange, Malta Stock Exchange, Warsaw Stock Exchange, Wiener Börse, and Zagreb Stock Exchange.

Collectively, the 14 exchange operators are present in 26 Member States of the European Union.

The participating exchanges have agreed to establish a joint venture that will evaluate and prepare an application as a consolidated tape provider in a future selection process led by the European Securities and Markets Authority (ESMA).

According to a statement from Deutsche Börse, the project is responding to the European Commission’s proposal for an equities tape that will help contribute to the development of the Capital Markets Union.

A consolidated tape aims to remedy the costs and inefficiencies of Europe’s currently fragmented market data. The project will focus on providing a comprehensive, standardized, and consistent source of market data with the consortium due to collaborate with regulators in order to develop the most optimal solution for investors.

Deutsche Börse further noted that the consortium’s exchange participants are recognized specialists in supplying reliable and high-quality market data and are, therefore, well-positioned to deliver a consolidated tape quickly, efficiently, and to the highest operational standards.

Responding to the announcement, the European Fund and Asset Management Association (EFAMA), the representative association for the European investment management industry, welcomed the proposal.

EFAMA stated that the proposed action affirms the buy-side’s long-standing view that a European consolidated tape is key to completing the objectives of the Capital Markets Union and ensuring that European capital markets remain globally competitive. The association noted, however, that, as with any proposal, the devil will be in the details.

Tanguy van de Werve, Director General of EFAMA, said: “It is our sincere hope that the review of MiFID/R will yield a viable framework for the emergence of a consolidated tape. The recent announcement by 14 exchange groups is welcome in this regard. Nevertheless, it is important that the resulting equities tape displays both pre and post-trade equities/ETF data in real-time. From a cost perspective, the equities/ETF consolidated tape should be provided on a reasonable commercial basis, as already foreseen in MiFID/R. This will ensure wide take-up of the tape in the user community. Finally, the consolidated tape should meet the needs of market participants, and in no way be used to render European exchanges’ own proprietary feeds more attractive.”

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