On 16 December 2024, the Financial Conduct Authority (FCA) published a new report and an update on its work to establish an equities consolidated tape (CT).

Background

As the FCA explains in its related press release, a CT collates market data, such as prices and volumes associated with trades in a financial market. It is intended to provide a comprehensive picture of transactions in a specific asset class, bringing together trades executed on trading venues as well as those arranged over-the-counter.

The FCA expects a CT to strengthen UK markets by making them more transparent and liquid. It said in its December 2023 consultation on the topic that, before finalising design proposals, it would conduct an analysis of the possible impact of the inclusion of pre-trade data in an equities CT, as views were polarised on it. An independent consultancy was appointed in August 2024 to conduct that analysis.

The report and update

The newly published report sets out the results of the independent review, and the FCA’s update highlights key insights from the report as well as setting out next steps.

In terms of next steps, the FCA plans to engage widely on potential design options for a UK equity CT early in 2025, and work towards publishing a consultation paper later in the year. In particular, it intends to:

  • Arrange a round of targeted discussion with industry, including roundtables, bilateral meetings with market participants and meetings with trade associations, with the aim of refining the FCA’s understanding of the costs of consolidating equity market data, gaining further information on the ways consolidated equity data might be used and gathering feedback on policy options.
  • Conduct a survey of equity market participants, to help inform the cost-benefit analysis associated with an equity CT. The survey will focus on identifying the potential demand for a CT based on the policy options, identifying the types of firms who will use the tape and the scope and impact of their use.

Call for expressions of interest

The FCA is also issuing an invitation for potential consolidators to express their interest in providing an equity CT. Potential consolidators that wish to take part in the dialogue the FCA will be conducting with market participants (starting in January 2025) should respond to the call for interest by 10 January 2025.