A consortium of Europe’s leading asset management association has called on the EU to establish an equities consolidated tape (CT) in order to democratise access to the continent’s capital markets for investors.

The call came from Efama, Germany’s BVI, the European Forum of Securities and the Nordics Securities Exchange ahead of a forthcoming review of MiFID II and MiFIR.

In a joint letter, the associations laid out their priorities for the review, which they stated “will be key to the future success and competitiveness of the EU’s capital markets”.

An “appropriately constructed” CT would help to build “deeper and more open capital markets in Europe”, states the letter. It would also give asset managers and other investors a “standardised view of European trading” as well as easier and less expensive access to market data.

In essence, a CT collates real-time exchange information, like price and volume, and disseminates it to investors. The buy-side has long called for such a system in Europe, and it is seen as a pre-requisite if Europe is to create a truly pan-European securities market.

The establishment of a CT was included as part of the EU’s capital markets union action plan back in 2020.

Now the likes of Efama are pushing for progress on what it views as a critical issue.  The associations state that the CT should be as close to real-time as technically possible in order to be attractive to market participants and commercially viable.

They also call for an “appropriate governance framework” to ensure a broad representation of the market, including the “data user community” being able to have some input on setting policies and fees on market data.

The rising cost of market data provided by the various exchanges has been a growing concern for buy-side users in recent years. But while a CT should help reduce this cost, more will need to be done, according to the associations.

“The challenge with high and increasing market data costs must be addressed head-on, including through strengthening of the MiFID II and MiFIR requirements, standardisation of pricelists, policies, audit procedures, etc., regardless of the existence of a CT,” states the associations’ letter.

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