The European Fund and Asset Management Association (EFAMA), and many of its members, are continuing to call for a consolidated tape (CT) for equities.
EFAMA affirmed this stance in reference to the ongoing discussions in the European Parliament and Council.
CT, also known as real-time tape, is a high-speed, electronic system that reports the latest price and volume data on sales of exchange-listed stocks.
The association said: “Together with a broad majority of market participants, including the sell-side and alternative trading venues, we have consistently made the case for a real-time tape for equities with the inclusion of pre and post-trade data.
EFMA notes that, given the design of the consolidated tape will afford fair compensation back to the stock exchanges as contributors of data, there is no reason to opt for a tape that is delayed, slow, or containing anything less than live streams of data.
“As institutional investors who make investment decisions directing capital flows, we know better than most the value of the data that we are requesting, and how the failure to produce such a tape will hinder growth in the Capital Markets Union (CMU), and institutionalise a weakness we have vis-à-vis other jurisdictions for years to come,” says EFAMA.
“We are surprised that real-time data delivery should even be contested, given that industry’s position has been recognised and supported by the European Parliament on this topic, and by the European Commission proposal itself.”
In April 2022, EFAMA and a number of its members wrote an open letter to the European Commission to encourage the introduction of a standard CT to the European market.
Tanguy van de Werve, director general of EFAMA, says: “Over the last two years, the industry has been working to help design a viable framework for the CT.”
“If the use-cases for market participants on real-time data — as opposed to one-minute or 15-minute delayed data — are not compelling enough, you would think that policymakers would be fearful of the longer-term risks of failing to produce a viable tape, and the missed policy objectives.”
He added: “For me, it is clear that the democratisation of data, the global competitiveness of our CMU, and the increased transparency for all investor groups, including retail, hang in the balance. I hope that these negotiations will ultimately yield a commercially viable tape that users will want to purchase.”
This week, EFAMA also welcomed the Council of the EU’s adoption of the Corporate Sustainability Reporting Directive (CSRD).
The news comes days after the first set of European Sustainability Reporting Standards were finalised by the European Financial Reporting Advisory Group and submitted to the European Commission for adoption.
Mandatory European sustainability reporting standards are crucial as insufficient availability of ESG data is a key impediment to realising the full potential of the EU’s sustainable finance regulatory framework, EFAMA says.
However, the first available corporate reports are not expected to be available until 2025 and the full scope for all applicable firms will not be in place until 2028.
Commenting on this, EFAMA affirms that the “chronic lack of corporate ESG data in this interim will unfortunately remain an issue, leading to uncertainty in the sustainable investing arena”.
EFAMA’s Werve adds: “With the availability of these corporate reports being staggered between 2025 and 2029, our industry will be left picking up the ESG data pieces in the meantime.”
