ICMA responds to the ESMA MiFIR Review Consultation Package on Technical Standards related to Consolidated Tape Providers and DRSPs and assessment criteria for the CTP selection procedure
29 August ICMA welcomes ESMA’s proposals to further define the EU consolidated tape framework with a view to improving transparency in the EU bond markets, following the latest amendment of the Markets in Financial Instruments Regulation (MiFIR) which entered into force on 28 March 2024.
Key points:
As highlighted throughout our response to this consultation, ICMA is of the view that in the development of the framework for a Consolidated Tape for bonds, it is important that a distinction is being drawn between different asset classes.
- In particular, the bond market with its mechanics is very different from the equity market and this important distinction has to be reflected in the upcoming transparency regimes
- When defining the framework for a consolidated tape, there is a trade-off to be balanced between a) the cost of the consolidated tape and technical requirements and b) latency and data quality/accuracy. Such trade-offs have to be viewed differently with respect to the different asset classes.
- Whereas requirements for latency and real-time transmission may play a pivotal role in equity markets, the underlying nature of bond markets is very different, and the focus here should be on high data quality and accuracy.
- A strong governance model of the CTP is key and ICMA welcomes ESMA’s proposal to set up an administrative committee consisting of data providers and data users.
- Ultimately, the successful CTP “project” will depend on the right calibration of the framework, and a good collaboration of all involved stakeholders, with the aim to make high quality data accessible in a consolidated form, at an affordable cost, thereby allowing for a wide market participation across EU bond markets.
To read the full ICMA response, click here
