16/09/2011
By Matt Ritchie
The European Fund and Asset Management Association has formulated a blueprint for a European consolidated tape (ECT), which aims to reduce both indirect and direct costs for investors and improve the quality of information on trading.
EFAMA said the liberalisation of trading venue regulation under the European Commission’s Markets in Financial Instruments Directive has exposed weaknesses in the regulation of data quality and aggregation. This has led to “great difficulties” in determining market prices and volumes with certainty.
Director general of EFAMA Peter De Proft said the next iteration of the financial instruments directive, MiFID II, must improve data quality and aggregation provisions, imposing binding minimum quality standards for trade reporting and “vigorously fostering” data aggregation.
“EFAMA proposes a blueprint for a European consolidated tape to contribute to the public debate on this crucial issue, and to provide buy-side input to the European Commission for the upcoming legislative measures.”
Announcing the publication of the blueprint, EFAMA said that although it might be expected market users would support a competitive commercial solution, this initiative is addressing a single official ECT.
In part this reflected the absence of a comprehensive and enforceable solution, and while commercial solutions may address many issues ahead of any imposed ECT, EFAMA expected that standards will still need to be set and supervised by the European Securities and Markets Authority.
“The investment management industry and indeed all market participants will greatly benefit from the appropriate strengthening of MiFID provisions on data quality and aggregation, but such measures can also contribute to the overall improvement of trading on Europe’s equity markets,” De Proft said.
Download the ECT here (pdf)
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