Market Data Users Identify Gaps in EU Consolidated Tape
European capital markets are poised for a transformative leap with the introduction of a consolidated tape (CT) for equities and ETFs, aimed at bolstering transparency and efficiency. Industry groups EFAMA, EPTA, and Protiviti have outlined critical shortcomings in the current framework, urging regulators to adopt measures that WOULD ensure the tape's success.
Key recommendations include expanding pre-trade quote depth to five layers, enhancing visibility into supply and demand dynamics. Venue identification on pre-trade data is also emphasized to foster trust and improve execution quality. The inclusion of ETCs and ETNs is advocated to prevent market fragmentation.
A well-designed CT aligns with the Savings and Investment Union's objectives, empowering investors with richer data for informed decision-making. The push for greater pre-trade transparency could tighten spreads and stimulate secondary market growth.
