Consolidated tape project falls at first hurdle

Consolidated tape project falls at first hurdle

A commercial initiative to build an industry-led consolidated tape for European equities has been abandoned after the backers of the project failed to gain a consensus among disparate market participants.

The Coba Project - set up Graham Dick, former head of business development at Chi-X Europe and Mark Schaedel former global head of market data at Nyse Euronext - says it has suspended operations after spending almost a year trying to win support for the initiative from exchanges, market data vendors, regulatory bodies and buy and sell-side participants.

Dick and Schaedal issued an open letter to the industry in November last year laying down the collaborative efforts required to achieve implementation and requesting written confirmation of support. But a stakeholder working group convened to discuss proposals failed to reconcile a clash between exchanges and market data vendors over the inclusion of pre- and post-trade data, with the former concerned with pre-trade risks and the latter questioning the value of a post-trade only solution.

Among brokers and institutional investors, the deal-breaker related to the costs associated with the achievement of adopting best practices for OTC trade reporting and the incremental costs implied by a phased implementation.

Dick and Schaedal were also stymied by the reluctance of regulatory bodies and policy makers to endorse any single commercial initiative.

"Due to increased political pressure to revert to a single tape provider solution, there is significant execution risk for any commercial solution," they conclude.

Comments: (2)

A Finextra member
A Finextra member 20 March, 2013, 09:59Be the first to give this comment the thumbs up 0 likes

A sad but always likely end i am afraid. Turkeys rarely vote for Xmas and the data industry is far too filled with vested interests and commercial barriers for the consolidated tape to have much chance. Especially without regulatory enforcement. Thats very unlikely in a highly competative business. Best chance is for a industry not for profit utility where non competing areas could be merged. Even then trying to heard all these cats and get a common acceptence let alone agreement is doubtful. Strange when so many firms in the market want and need a consolidated tape the supply industry fails to deliver. Another oddity in the FS industry

Andrew Miller
Andrew Miller - Net Effect Ltd - London 20 March, 2013, 17:01Be the first to give this comment the thumbs up 0 likes

Maybe we should not view this as the 'end' of an initiative, but just an inevitable stumble on a path that is strewn with trip-steps. This particular expedition may not succeed but I detect an increasing will amongst the originators of market data to reduce costs if not monetise their data.

If you have access (or get the free trial), see  "www.waterstechnology.com/inside-market-data/opinion/1618113/whose-data-is-it-anyway" for a 12 year old view!

It's a well worn idea that will, IMHO, be picked up and brought to fruition as regulation, new players and maturing technology necessitate and facilitate change. 

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