Pick a model, any model

Anyone reading the recent Presidency compromise MiFIR texts (published 4th and 13th February) can see that the subject of European Consolidated Tape (ECT) features again. The Council is now opting for appointment of one entity to collect trade reports and consolidate the data into a tape. Sound familiar?

Dipping into the Regulation Matters Back catalogue I fished out the 3 operating models for a European Consolidated Tape that were up for grabs back in the original December 2010 consultation on the review of MiFID (doesn’t time fly!):

A. ECT operated by a single, non-profit seeking entity, established and appointed by a legal act;
B. ECT operated by a single commercial entity, appointed by the EC following a public tender (subject to re-tender after a limited period);
C. ECT operated by competing commercial providers, approved by competent authorities.

Since 2010 the Commission proposal has plumped for option C; the Parliament has sided with C but with A as a fall-back provision; and now the Council is leaning towards B. So we have come full circle (or is it a triangle) with all 3 options still on the table. What will the trilogue agree on when it gets going?

Comments
2 Responses to “Pick a model, any model”
  1. Any single solution, under A or B, will impose a monopoly on commercial organisations with powerful competing interests. It’s like making trains coming from different directions run through a single rail station. You can’t do this safely until you have designed the signals, points and sidings to avoid collisions. Any other approach involves learning by train-wreck.

    So under A, B or C there needs to be a clear specification and acceptance of the commercial rights and obligations of any ECT “commercial solution” and how these fit in with the commercial rights and obligations available via existing market data services.

  2. Anne Plested says:

    Thanks Reg, I agree. Regardless of model, aside from the establishment of post-trade data standards to facilitate the consolidation, the licensing for consolidated data with its varying usages and consumer options needs to be worked out.

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