A group of ten signatories, made up of the buy-side, sell-side, and industry associations, have unveiled their recommendations for the eventual consolidated tape provider (CTP) for equities and ETFs in Europe.
These recommendations come off the back of an Adamantia feasibility study, conducted in 2022 with a group of sell-side and buy-siders – named ‘the Adamantia initiative’ – which sought to explore the economic viability of the EU’s CTP for equities.
The aim is to make the CT “a successful and viable tool for EU Capital Markets […] from a user’s point of view,” said the firms.
Specifically, those backing the Adamantia recommendations are: Barclays, BlackRock, BNP Paribas, Credit Agricole CIB, Invesco, Societe Generale, AFME, AMAFI (Association Francaise des Marches IInanciers), EFAMA (European fund and asset management association), and FIA EPTA (European Principal Traders Association).
These entities are endorsing, among other things, a CT wherein data is “disseminated to users with an end-to-end latency of 100 milliseconds or faster” for as low a price as possible – with the notion being that this will motivate the greatest number of users of the tapes.
This feeds into a follow up point, wherein the Adamantia initiative reiterated the importance of voluntary consumption – without regulatory obligation to use the CT.
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As well as the latency suggestion, the parties are also recommending that the eventual CTP leverage established industry standards when it comes to transmission protocols, with the data stream made easily available on firms’ ‘usual’ terminals from the off.
In addition, the ten point expectations outlined by the firms also highlight the importance of handling pre-trade data correctly, with this attributed data to be included from the outset.
“While the decision to extend the scope of pre-trade data does not rest directly with the CTP, it will be critical for the CTP to build this capability into the design of its solution from the outset,” asserted the firms.
Elsewhere, the Adamantia initiative touched on the importance of data quality – acquiescing that while venues and APA do remain fully responsible for the accuracy of data provided, the CTP in question must “play a key role” when it comes to maintaining a virtuous data cycle, including successfully identifying erroneous trades.
Read more – Consolidated tape: Avoiding a ‘garbage in and garbage out exercise’
In addition, for post-trade, the recommendation is for the CTP to report in a single currency at ISIN level so as to “better represent the ‘pan-EU market tradability’ of these instruments,” said the firms.
The final highlighted point concerns convergence between the EU and UK tapes, with common principles recommended in order to allow for maximum integration, and subsequent usability across the regions.
Specifically, the group explained: “We encourage the definition of common principles in terms of technical specifications, communication protocols, data fields and CT accessibility.”