European Union regulators are pushing ahead with a central database to track euro bonds as part of efforts to strengthen the bloc’s financial markets after Brexit.

A document from the EU’s executive arm Tuesday outlined plans for a so-called consolidated tape for corporate bonds, which would help fulfill a longstanding ambition in the bloc to bring together all data on completed trades. The change would increase secondary trading in euro-denominated bonds and boost the appeal of the securities for issuers and investors, according to the document.

The move forms part of a raft of measures the EU is taking to boost its financial markets as the U.K.’s split from the union starts to fragment trading. Despite years of consultations and an established data stream in the U.S., there is currently no single source of post-trade data for EU bonds or equities.

“The fact that the Commission acknowledges that a single, reliable source of data will increase transparency and attractiveness of its markets is a very positive step,” said Niki Beattie, founder of Market Structure Partners, who published a study last year on the benefits of such an initiative.

(Bloomberg) — European Union regulators are pushing ahead with a central database to track euro bonds as part of efforts to strengthen the bloc’s financial markets after Brexit.
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“The fact that the Commission acknowledges that a single, reliable source of data will increase transparency and attractiveness of its markets is a very positive step,” said Niki Beattie, founder of Market Structure Partners, who published a study last year on the benefits of such an initiative.

De federatie van Europese beurzen, de FESE, spreekt zich hard uit tegen een variant van een centraal verzamelsysteem voor transactiedata. In een paper dat in handen is van het FD, zegt de FESE dat de variant die de Europese Commissie voorstelt te duur is en geen duidelijk nut heeft.

Daarmee gaat de federatie, waar onder meer Deutsche Börse en Euronext bij zijn aangesloten, rechtstreeks in tegen een rapport dat het Britse adviesbureau Market Structure Partners (MSP) in oktober publiceerde in opdracht van de Europese Commissie…

Verbazing
Niki Beattie, ceo van Market Structure Partners en opsteller van het door de Commissie bestelde onderzoek, is verbaasd. ‘Ik vraag me af of de FESE ons rapport wel heeft gelezen.’ Volgens Beattie zijn er tientallen duidelijke voorbeelden waarin een centraal verzamelsysteem nuttig is. ‘Op dit moment weet niemand hoeveel precies in een bepaald aandeel wordt gehandeld, aangezien een groot deel van de aandelenhandel in Europa buiten de publieke beurzen om gebeurt.’ Dat zorgt ervoor dat bied- en laatprijzen verder uit elkaar liggen dan nodig. Beattie: ‘Als die gegevens openbaar zijn, dan heeft iedereen die in aandelen handelt daar baat bij. Het zou beleggers miljarden besparen.’

Uiteindelijk draait de vraag of er een consolidated tape moet komen en wat die dan moet bevatten, om slechts één ding: geld. Zakenbanken zijn niet happig op verandering, omdat zij voordeel hebben bij de huidige situatie. Volgens Beattie profiteren deze, voornamelijk Amerikaanse partijen, doordat zij de meeste handelsinformatie hebben en die het best kunnen verwerken.

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The federation of European stock exchanges, the FESE, is strongly against a variant of a central collection system for transaction data. In a paper in the hands of the FD, the FESE says that the variant proposed by the European Commission is too expensive and has no clear use.

With this, the federation, to which Deutsche Börse and Euronext are affiliated, is directly contradicting a report that the British consultancy Market Structure Partners (MSP) published in October on behalf of the European Commission .

Amazement
Niki Beattie, CEO of Market Structure Partners and author of the study ordered by the Commission, is amazed. “I wonder if the FESE has read our report.” According to Beattie, there are dozens of clear examples where a central collection system is useful. “At the moment, no one knows exactly how much is traded in a particular stock, as much of the stock trading in Europe takes place outside the public stock exchanges.” This ensures that bid and ask prices are further apart than necessary. Beattie: ‘If that information is public, then everyone who trades in shares benefits from it. It would save investors billions. ‘

Ultimately, the question of whether there should be a consolidated tape and what it should contain revolves around one thing: money. Investment banks are not keen on change because they benefit from the current situation. According to Beattie, these, mainly American parties, benefit because they have the most trade information and can best process it.

La Federation europeenne des bourses (FESE) a reagi durement au rapport du cabinet Market Structure Partners (MSP) qui avait rendu, debut octobre, sa proposition a la Commission europeenne (CE) pour la creation d’une base consolidee d’enregistrement pour les donnees de marche prost-trade…

…«Les intérêts opposés d’une poignée d’intermédiaires puissants répartis en deux groupes – actuellement les seuls a profiter de l’absence de base consolidée et de l’asymétrie autour des données et dont aucun n’a plus le fondement moral pour émettre un avis – ne devraient pas dominer ce débat», répond Niki Beattie, la directrice générale de MSP. …

…«Il est dans l’intérêt de la FESE de corriger le problème qui permettrait d’acheminer les flux vers les marchés transparents et d’améliorer la formation des prix. Mais si le problème du coût n’est pas résolu, alors ce flux ne sera acheminé que vers les marchés primaires, et non vers l’ensemble des plates-formes pouvant offrir le meilleur prix ou la meilleure liquidité, car les investisseurs n’auront pas tous les moyens de rassembler l’ensemble des données, ce qui nuira à des marchés équitables, transparents et compétitifs», conclut Niki Beattie.

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The European Federation of Stock Exchanges (FESE) reacted harshly to the report of the Market Structure Partners (MSP) firm which, in early October, made its proposal to the European Commission (EC) for the creation of a consolidated registration base for prost-trade market data …

… “The competing interests of a handful of powerful middlemen split into two groups – currently the only ones to profit from the lack of a consolidated base and asymmetry around data and none of which has a moral foundation any longer. to give an opinion – should not dominate this debate ”, answers Niki Beattie, the managing director of MSP. …

… “It is in the interest of the FESE to correct the problem which would make it possible to route flows to transparent markets and improve price formation. But if the cost issue is not resolved, then this flow will only be channeled to the primary markets, and not to all the platforms that can offer the best price or the best liquidity, as investors will not have not all the means to bring together all the data, which will harm fair, transparent and competitive markets, ”concludes Niki Beattie.

…Financial News spoke with Beattie about the future of London as a financial-services hub post-Brexit, what worries her clients and the impact of the Covid-19 pandemic on markets.

I’d like to start with Brexit. Do you see London’s status as a top financial hub diminishing over time?

Yes, it’s inevitable. But it is not just London that is going to suffer; European financial markets as a whole will be hurt by the loss of London as a top financial hub. The efficiencies that were gained from EU harmonisation and passporting will be lost to both European and UK issuers and investors who will find both UK and European markets a more expensive place to invest and raise capital. I don’t see any other single city in Europe taking the spot that London has created as a financial powerhouse, certainly not in the near to mid term. The winners from Brexit will be non-European financial centres.
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… Although a key aim of MiFID II, a review of the regulation from the European Securities and Markets Authority (ESMA) has admitted that MiFID II has not had any positive impact on the contentious issue of market data fees. ESMA has previously stated that the introduction of a real-time consolidated tape in Europe could be a solution to the problem.

Niki Beattie, CEO of Market Structure Partners and author of the European Commission-backed research, outlined that the study had highlighted a clear need for a European consolidated tape. But warned it is unrealistic a tape will be established under the current market legislation.

…While outages typically stem from a software failure, hardware issue or cyber attack, Euronext cited a “middleware” issue for the crash that halted trading in Paris, Brussels, Amsterdam, Lisbon and Dublin.

“To use an analogy, the pilot used to have a dashboard and a joystick that moved the rudder but now there is a middle bit where the joystick sends instructions into a computer before the rudder gets moved,” said Niki Beattie, founder at Market Structure Partners. “When middleware goes wrong it is like the joystick falling off.”…

3 November 2020 – EFAMA and EFSA welcome the publication of a Market Structure Partners Study on the Creation of an EU Consolidated Tape which addresses the challenges, demand, benefits and proposed architecture for consolidating European financial market data.

We believe that an appropriately constructed consolidated tape (“CT”) could help to build deeper and more open capital markets in Europe. In line with the European Commission’s vision for the Capital Markets Union, a key aim should be to democratise access across European markets to provide all investors regardless of resources or sophistication with a comprehensive and standardised view of European trading.

Our members do not believe that a CT is the solution to the concerning issue of increasing market data costs. This issue must be addressed head-on, including through the proper enforcement of the MiFID II and MiFIR requirements, standardisation of pricelists, policies, audit procedures, etc.**, regardless of the existence of a CT.

The two issues are nevertheless connected as the commercial viability of the consolidated tape provider (CTP) will be closely connected to the price at which it obtains input data from trading venues and Approved Publication Arrangements (APAs) as well.

We look forward to engaging with the Commission and regulators over the coming months to address the challenges relating to the development of a CT and the issue of increasing market data costs.

Investors in Europe learned the hard way this month that key structural differences between some of the region’s main stock exchanges and their U.S. counterparts put them at a costly disadvantage when it comes to trading stocks.
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The consolidated tape would save investors “billions of euros…provide better investment outcomes for investors [and] promote greater competition and resilience” among trading venues, said Niki Beattie, chief executive of Market Structure Partners and an independent, non executive chair at Aquis. Market Structure Partners, a U.K.-based consulting firm, in October published a report for the European Commission on the merits of establishing a consolidated tape. That followed a call in December from the European Securities and Markets Authority, the regional regulator, to establish a consolidated tape for stock quotes. …

…Ces données sont importantes pour la mesure par l’investisseur final de la «best execution» par ses brokers intermédiaires, et plus largement pour l’évaluation de la liquidité par les investisseurs (et leurs intermédiaires) : ces derniers déplorent de devoir «s’appuyer sur des données sous-optimales» qui avantagent «un sous-ensemble d’intermédiaires financiers profitant d’un avantage potentiel des asymétries de données sur le marché», indique Niki Beattie, CEO de Market Structure Partners. …

…These data are important for the final investor to measure the “best execution” by his intermediary brokers, and more broadly for the assessment of liquidity by investors (and their intermediaries): the latter deplore having to “s’ relying on sub-optimal data ”which benefits“ a subset of financial intermediaries enjoying a potential advantage of data asymmetries in the market, ”says Niki Beattie, CEO of Market Structure Partners. …