[ I N D E P T H | C O N S O L I D A T E D T A P E ]
The fact that no market participants came forward to be the CT provider under the previous regime is striking . DotEcon ’ s recent report on the appropriate economic model for a CT – commissioned by the FCA , explained that “ the lack of entry of a CTP to date in both the UK and the EU at minimum indicates that a CTP ’ s business case is fragile ”.
In terms of addressing this and compensating data providers , DotEcon highlighted the inability to impose commercial motivations when there are multiple TVs and APAs feeding into a CTP , explaining that the actual value of each data source ’ s contribution is marginal .
This is a key point , as every player is justifiably seeking to benefit from the build-out but demonstrably concessions must be made . It is inevitable and the balancing between these points of view is a monumental task on both sides of The Channel .
Speaking to The TRADE , the FCA shed light on its approach : “ Our proposals allow [ CTP ] bidders to operate on a for profit basis because we think to rule this out would unhelpfully constrain the potential range of bidders .”
Economics aside , the main focus , quite rightly , is on data quality . However , as regards to the UK and Europe ’ s approaches , the accountability for the data itself – ensuring data submitted to a tape is correct and apt – remains key . In terms of who the responsibility for cleaning and
“ Data feeds into every part of the buy-side workflow , across the front , middle and back office .”
PAUL O ’ BRIEN , FOUNDER AND CHIEF EXECUTIVE , GLIMPSE MARKETS
processing data ( and when needed , challenging incorrect data ) will fall to remains up in the air . Will it be up to the venues themselves , or the providers of the consolidated tapes ?
Speaking to The TRADE in April , Nicolas Rivard , head of advanced data services at Euronext , said : “ In the end , the CTP is not responsible for the data which is provided by the contributors […] so there needs to be a feedback loop , or a virtuous circle , established from the start and enshrined in its development in order to counteract any challenges
“ They ' re [ FCA ] leaving it up to the market to figure out a way of striking the right economic balance .”
64 // TheTRADE // Q3 2023
NATHANIEL LALONE , PARTNER AT KATTEN MUCHIN ROSENMAN