The UK Financial Conduct Authority (FCA) has announced a range of new initiatives aimed at reducing trading costs and enhancing the regulatory framework. One such initiative is the introduction of a consolidated tape (CT) for trading data, which seeks to provide a comprehensive view of market activity.
Consolidated tape for low-cost trading data
The FCA’s objectives are to promote better-informed investment decisions, foster a resilient trading environment, and enhance market competitiveness. As part of these efforts, the FCA plans to implement a consolidated tape that combines various sources of trading data into a unified stream. This consolidated tape will greatly enhance transparency and accessibility, enabling more efficient and informed investment decision-making.
Furthermore, this measure brings about a reduction in trading data costs and an improvement in data quality. Initially, the CT will be implemented for bonds, given the UK’s prominent position as a global market leader in this asset class, before eventually expanding to include equities.
To implement this initiative, the FCA intends to initiate a competitive tender process to select a single provider for the CT in the bond market. This plan is a crucial component of the Edinburgh reforms and is expected to be realized through collaboration with the government by 2024.
Sarah Pritchard, executive director of markets and executive director of international at the FCA, said:
Sarah Pritchard
We are adapting our rules to make sure the UK market works well, providing certainty for firms and so providing a good environment for investment.
The new consolidated tape will help reduce trading costs, increase transparency and improve data quality.
Other enhancements
In addition, the FCA plans to explore further enhancements to transparency requirements for bonds and derivatives later in the year. The goal is to establish a streamlined and more effective regulatory framework that can enhance the quality and delivery of trade data across UK markets.
Additionally, the UK markets regulator has unveiled further measures to enhance competitiveness within the financial market including guidance that addresses inquiries from market participants with the aim of fostering innovation and the adoption of new technologies. The forthcoming guideline aims to provide clarity on the circumstances in which firms may require authorization as a trading venue and it is implemented in October 2023.
Moreover, the FCA has introduced the pre-application support service (PASS) to assist firms, particularly those based outside the South-East or planning expansion in the devolved nations. This service offers advantages such as pre-application meetings and the opportunity to attend industry events where FCA representatives discuss the authorization process.
Pritchard added:
Our other measures announced today aim to further support the UK’s thriving financial services sector.
Experienced writer and journalist, working in the global online trading sector, Steffy is the Editor of LeapRate. She has previous experience as a copywriter and has been with the company since January 2020. Steffy has a British and American Studies degree from St. Kliment Ochridski University in Sofia.
