EFAMA calls for creation of consolidated tape

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EFAMA has called on the European Commission (EC) to enforce the creation of a consolidated tape (CT), commenting: “MiFID II still fails to deliver a CT and the notion of “Reasonable Commercial Basis” in data cost has been largely overlooked.

The CT issue was widely discussed in the regulatory panel at the recent etfLIVE summit.

EFAMA’s Director General Tanguy van de Werve comments: "We reiterate our support for the overarching objectives of the MiFID II and MiFIR framework which, for the most part, is working as intended. We are calling for targeted improvements such as to provide more flexibility to professional investors, to increase market transparency by mandating the creation of a consolidated tape for all financial instruments and to address data quality and data cost issues through a stricter enforcement of existing rules."

Brian Higgins, partner, Dillon Eustace, and etfLIVE Europe panellist, comments: “As EFAMA has highlighted, it is important to ensure that timely and good quality data is available to market participants at a reasonable cost . While the disclosure requirements under MiFID II have improved market transparency and been of assistance to market participants, the requirements can be improved and the goal of an effective Consolidated Tape (with post-trade data being the starting point) should be pursued with the full support of the EU Commission.”

Answering the question of what would be the most appropriate way of determining the Official List of ETFs, bonds and derivatives defining the scope of the EU consolidated tape, EFAMA writes: “A successful CT should be covering all asset classes and be populated based on existing reporting (MiFID II, SFTR, EMIR Refit) and should be accessible using existing infrastructures (CCPs, exchanges and venues).

“ETFs have proved extremely resilient through the recent period of market volatility and additive to the overall functioning of markets. The European ETF industry has benefited from the execution transparency delivered through MiFID II by enabling market participants and sophisticated investors to see the volume of ETF trading that occurs daily.

“There do remain opportunities for further strengthening of the ETF ecosystem via the appointment of a regulated Consolidated Tape Provider (CTP) who would aggregate and disseminate trade reporting to all venues and clients with limited delays, including for ETF. This reinforces the need for a consolidated tape across fixed income and equity markets.

“Regarding Bonds, we agree for their inclusion in the CT, but we must keep the possibility of deferrals for block trades. This being said, we wish the periods and rules applicable to deferrals to be harmonised among Member States, which is not the case today.”

“Regarding Derivatives, a difference must be made between listed Derivatives and OTC Derivatives having an ISIN code (to be included in the CT), contrary to OTC Derivatives without ISIN codes yet.”

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