The European Principal Traders Association submitted a response on 13 February to the Financial Conduct Authority‘s Consultation Paper CP25/31, on the framework for a UK equity consolidated tape (CT).
EPTA supports the FCA’s proposed design to include post-trade data and an attributed top of book for pre-trade bids and offers. Whilst we would prefer a CT with five layers of pre-trade data, we recognise the challenges of delivering this initially. In the consultation, we express a preference for delivering a tape sooner even if compromises need to be made, whilst still building to optimise for the future.
Quotes from systematic internalisers should not be included in the pre-trade data as they will merely create noise and operational burden for the CT provider, in EPTA’s view. Cost to industry would also likely be material, with little to no value for tape users.
EPTA agrees on the proposal for 100 millisecond latency from receipt to publication, believing this strikes the right balance between operationalisation and cost. License structure should be as simple as possible with no differentiation for use case, in our view. A Reasonable Commercial Basis pricing framework would be unnecessarily complicated, as the CT will operate with a different business model than other market data provision.
EPTA also recommends that the equity tape include exchange traded commodities and exchange traded notes. Those instruments trade more like exchange traded funds, so are more appropriate on the equity tape than a bond CT.
Read full response here.