Euronext and Deutsche Boerse are among 14 European stock exchange groups — who operate in 26 member states of the EU –that have announced a joint initiative to participate in the creation of a combined feed of their share prices to investors.
Reuters reported that EU states and the European Parliament are due in coming months to finalise a draft law that would mandate exchanges to provide prices of stock transactions on their platforms to a low price “consolidated tape” (CT) for investors to spot the best deals.
Once the draft law has been approved, securities watchdog ESMA would oversee a selection process for a CT provider, and the exchanges involved said they would submit a proposal.
The European Fund and Asset Management Association (EFAMA) welcomed the move.
“This 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,” said EFAMA.
“We have identified important use-cases for institutional and retail investors alike, not least in the ability to receive best execution on trades.
“We also believe in the potential of the equities/ETF consolidated tape to attract more capital flows into mid-cap and small-cap stocks, as well as smaller markets generally.
“As with any proposal, however, the devil will be in the detail.”
EFAMA Director General Tanguy van de Werve 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.”
Deutsche Boerse said: “… fourteen European exchange groups, present in twenty-six Member States of the EU, announced a joint initiative to participate in the future selection process for the provision of a consolidated tape (CT) for equities in the European Union.
“The project responds to the European Commission’s proposal for an equities tape to contribute to the development of the Capital Markets Union.
“The participating exchanges – cornerstones of financial markets across Europe with decades of experience in operating critical market infrastructure – have signed a term sheet to establish a joint venture that will evaluate and prepare an application as a CT provider in a future selection process.
“The participants are recognised specialists in supplying reliable and high-quality market data and are well-positioned to deliver a CT quickly, efficiently, and to the highest operational standards.
“The project will focus on providing a tape designed to provide a comprehensive, standardised and consistent source of market data and will seek to collaborate with regulators to develop the optimal solution for investors.
“Through this joint venture, the participating exchanges, as key players in the EU’s capital markets ecosystem, are reiterating their commitment to fostering the EU’s open strategic autonomy.”
The participants of the 14 European stock exchange groups involved are: Athens Stock Exchange, Bucharest Stock Exchange, Budapest Stock Exchange, Bulgarian Stock Exchange, Cyprus Stock Exchange, Deutsche Börse Group, Borsa Italiana, Euronext Amsterdam, Euronext Brussels, Euronext Dublin, Euronext Lisbon, Euronext Paris, Oslo Børs, Luxembourg Stock Exchange, Malta Stock Exchange, Nasdaq Stockholm, Nasdaq Copenhagen, Nasdaq Helsinki, Nasdaq Iceland, Nasdaq Riga, Nasdaq Tallinn, Nasdaq Vilnius, BME Exchange, Warsaw Stock Exchange, Prague Stock Exchange, Vienna Stock Exchange, Zagreb Stock Exchange and Ljubljana Stock Exchange.