The U.K. Financial Conduct Authority has published a final report commissioned from Europe Economics to evaluate the potential impacts of implementing a pre-trade equities consolidated tape in the U.K., together with an update responding to the findings of the report.
The EE report made a number of findings, including with respect to the usefulness of post-trade data, the institutional and retail use of pre-trade data, the impact of pre-trade data on market resilience, and the licensing of market data. The FCA concludes that there is a strong case for establishing an equities CT (including ETFs) with post-trade data, covering traded prices and volumes, as soon as practicable. Many market participants also think that to reap the full benefits from a CT and ensure it is commercially viable, the inclusion of pre-trade data is necessary. EE's report shows that the demand for a pre-trade CT is dependent on its design features.
The FCA will explore the different policy options for the U.K. equity CT and plans to engage with market participants on potential design options early in 2025, with a view to publishing a consultation paper later in the year. Potential CT providers that wish to participate in the FCA's engagement should respond to the call for interest by January 10, 2025. The FCA has also issued an invitation for potential CT providers to express their interest in providing an equity CT.
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