London (Reuters) – MarketAxess, Tradeweb, and Bloomberg said on Wednesday that they were looking into a single price feed for corporate and government bonds in the European Union as the group works to better integrate its capital markets.
The EU plans to change its rules on securities so that investors and banks will have to use a single price feed, or “consolidated tape,” for trading on different platforms in the bloc. This will help connect markets and improve the quality of data.
In a joint statement, Tradeweb, MarketAxess, and Bloomberg said, “Subject to the necessary regulatory approvals, the consolidated tape service is expected to be offered through a joint-venture company that will be set up and run separately from our own businesses.”
All three already have their own systems for reporting trades, called “approved publication arrangements” (APAs).
EU member states and the European Parliament are negotiating the draught law, but it’s not clear when the final go-ahead will be given because stock exchanges are pushing back on how a tape would work for stocks.
In U.S. markets, there are already stock and bond tapes, and Britain is thinking about making a fixed income market tape.
The European Securities and Markets Authority, which is part of the EU, will handle the process of getting tapes, giving them approval, and keeping an eye on them (ESMA).
The three companies said, “We think that the recently proposed legislative changes from the European Commission would make it possible to create a strong consolidated tape that will make the market more clear and help create a single, integrated European capital market.”
“As the next step, we are putting together a competitive request for information process to look at independent third-party technology and operating partner(s) for the consolidated tape service.”
One of the most important things to figure out for a bond tape is how to make deferrals, or how long it takes for data to be published after a transaction, more consistent. This will make the tape more timely.
