European member states came together for negotiations this week in yet another push to reach to an agreement on the setting up of a consolidated tape, reports Bloomberg (paywalled). Discussions to create a single stream of trading data for the bloc’s stock markets have been going on intermittently for more than a year without result. This is despite a consolidated tape being “seen as a key step to reviving moribund equity markets across the region”.
The main obstacle to an agreement being reached is indecisiveness surrounding the type of information the tape should carry. According to Bloomberg, “many exchanges are resisting the inclusion of real-time pre-trade data” – understandable, considering that selling data is an important stream of income for these organisations. However, others argue that a tape with only post trade data would have “limited value”.
A compromise
Sweden, which currently holds EU’s presidency, has suggested a compromise that includes pre-trade data, but excludes mentions of the trading venues that supplied the data. A document from the negotiations suggests that this compromise would give investors “an updated view of buying and selling interests, without unduly harming data providers”, Bloomberg reports.
The discussions about establishing a consolidated tape is part of the Markets in Financial Instruments Directive (MiFID) review, which, in turn, is seen as a precursor to setting up a Capital Markets Union (CMU) in the EU. Member states aim to reach a compromise before taking the discussion to the European Parliament and European Commission.