LONDON, July 5 (Reuters) – Britain's monetary watchdog proposed a real-time file of inventory and bond costs on Wednesday to assist traders spot one of the best offers and enhance the capital markets' attraction.
It's the newest in a welter of reforms, many contained in a brand new legislation permitted final week, to bolster the Metropolis of London as a world monetary centre, notably after being largely reduce off from the European Union because of Brexit.
The Monetary Conduct Authority (FCA) mentioned it was proposing to create a ‘consolidated' tape, which mixes buying and selling knowledge from the London Inventory Alternate and different platforms, to extend transparency, entry to buying and selling, and reduce buying and selling prices.
The FCA goals to have the regulatory framework in place by 2024 and would run a aggressive tender for a bonds market tape first, adopted by shares.
“By constructing a extra full image of the market, a CT will reinforce the UK’s place as a number one centre for the itemizing and buying and selling of bonds,” the FCA mentioned in a press release.
Banking physique UK Finance mentioned a tape would enhance investor confidence and hoped an equities tape would comply with a bond tape shortly, backed by obligatory contributions from all buying and selling platforms.
Later this 12 months, the watchdog will seek the advice of on additional reforms to the transparency of bond and derivatives markets to help supply of buying and selling knowledge alongside a tape.
Wall Avenue has lengthy had tapes for inventory and bond markets, and the EU has simply finalised a deal on updating its securities buying and selling guidelines that features introducing tapes for shares and bonds regardless of heavy pushback from exchanges in Europe.
The FCA mentioned in March it discovered that competitors in monetary market knowledge shouldn't be working in addition to it ought to and that it may change the foundations, findings that will “inform the design” of a tape.
Markets trade physique AFME mentioned that even an appropriately constructed tape wouldn't totally deal with the at present “unacceptably excessive value of market knowledge”.
“We belief that the FCA's intensive work on wholesale knowledge will assist deal with anomalies on this space, that are detrimental to monetary markets and their customers,” AFME CEO Adam Farkas mentioned.
There's additionally new steerage that can come into power in October to make clear the place the regulatory “perimeter” lies, which means when authorisation is required for an exercise, the FCA mentioned.
Reporting by Huw Jones; Modifying by Christina Fincher
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