Ediphy (fairCT) has been selected by the European Securities and Markets Authority to be the first consolidated tape provider (CTP) for bonds in the EU.
The decision comes after a six-month application assessment process, with ESMA stating that Ediphy was selected upon meeting all Markets in Financial Instruments Regulation (Mifir) selection criteria and reaching the overall highest award criteria score.
The group, co-ordinated by Ediphy, consists of Google Cloud, UBS, TP ICAP, Cboe Global Markets, FactSet, and Norges Bank Investment Management, entered the tender process in September 2024.
Natasha Cazenave, ESMA’s executive director, said: “With today’s decision, we are taking a decisive step towards setting up consolidated tapes in the EU. This step constitutes a key contribution to building the Savings and Investment Union (SIU) and to the further development of capital markets in Europe.
“Market participants will benefit from a consolidated view of market activity for bonds in the EU, with a variety of use cases to the benefit of all participants in the EU’s fixed income markets.”
Ediphy (fairCT) will now be expected to take steps the apply for authorisation, following which the group would operate the fixed income CTP for five years under ESMA’s supervision.
Chris Murphy, co-founder and chief executive of Ediphy said: “This milestone reflects Ediphy’s commitment to enhancing transparency and efficiency in EU bond markets, aligning with the goals of the Savings and Investment Union. In collaboration with the market, fairCT will deliver a comprehensive view of bond transactions, empowering market participants with better price discovery and fostering market integrity.”
Additional bidders in the tender process also included Etrading Software, BondTape and TransFICC, the latter of which is also bidding for the Financial Conduct Authority (FCA) CTP.
The provision of a CT for bonds is set to address key issues concerning fragmented liquidity across trading venues and various lit and dark trading protocols, and the appointment has been welcomed by other industry members.
“We look forward to engaging with Ediphy (fairCT) in the course of our continued focus on post trade transparency, including the quality of trading data,” said Victoria Webster, managing director of fixed income at the Association for Financial Markets in Europe (AFME).
“The EU bond consolidated tape will serve as a critical tool in enhancing and democratising access to post-trade information in the European bond markets. By consolidating trade data from multiple sources, the tape will provide market participants and investors with a comprehensive view of bond transactions, irrespective of their resources and level of sophistication, thereby improving price formation and discovery as well as market integrity.”