UK bonds consolidated tape is a major milestone for the UK – AFME responds to FCA consultation

AFME has responded to the FCA consultation paper CP23/15 regarding the Framework for a UK Consolidated Tape.
As a reminder, the FCA has proposed a framework for a UK CT to improve market data quality and transparency, starting with bonds and later including equity and derivatives. It suggests a single provider per asset class chosen through competitive tendering, free data submission, and a price cap for user licenses to ensure fair access.
AFME’s response supports the FCA’s efforts to establish a consolidated tape for UK bonds and highlights the importance of having a resilient, cost-effective consolidated tape that provides timely and high-quality data to enhance access and competitiveness in the UK market. AFME also emphasizes the significance of this initiative as a major milestone to ensure the competitiveness of the UK market. They believe that establishing a consolidated tape will broaden access to market data, benefiting both domestic and international investors.
AFME acknowledges the high cost of market data and trusts that the FCA’s work on wholesale data will address these issues. They stress the need for a simplified, single market data licensing framework for the consolidated tape, covering various use cases and specifying re-use and direct use of data. Standardizing the user license would make it easier to access data through authorized CTPs.
Furthermore, AFME suggests that the selection of a CTP should consider factors beyond just price. They recommend considering features that are beneficial to the market to strike a balance between operational capacity and cost.
To ensure effective governance of the consolidated tape, AFME proposes establishing a consultative committee with representatives from various user and data producer groups. This committee would meet regularly to provide advice and recommendations to the CTP.
AFME also emphasizes the importance of keeping operating costs low for users to maximize the benefits of the consolidated tape. They call for transparency in sharing information about operating costs with the consultative committee.
In addition, AFME believes that a well-functioning equities consolidated tape should include real-time, continuous pre-trade data with details on prices, sizes, and venues. These features would make the equities tape valuable and competitive compared to similar mechanisms in other jurisdictions.