For those working in and around fixed income, the idea of a consolidated tape (CT) has long been a dream just out of reach, however, developments over the past few months are beginning to see the vision realised. The introduction of Mifid II in 2018 arguably sparked the push for a tape to, as described by AFME, “democratise access for all investors,” and “contribute to the creation of a truly pan-European market”.
Consequently, on 3 July 2025, The European Securities and Markets Authority (ESMA) selected collaborative initiative, fairCT, co-ordinated by Ediphy, to become the first consolidated tape provider (CTP) for bonds in the EU. In contrast, for the UK tape, reality is not approaching quite so quickly.
On 29 August, the Financial Conduct Authority (FCA) granted the UK CTP contract to Etrading Software, however on 24 September, the tender decision received a legal challenge brought forward by Ediphy, following recent standstill extensions to the tender confirmation, marking a delay in the process.
Commenting on their decision, Ediphy said: “We have raised our concerns with the tender process through the appropriate formal channels. Our objective is, and will continue to be, to ensure a fair and transparent process that serves the best interests of the market.”
The challenge marks a delay in the process, and in response to the appeal, the FCA reiterated that it “undertook a fair, competitive two stage process to ensure the provider could deliver a high-quality tape and the best value for money”.
For Sassan Danesh, chief executive of Etrading Software, the challenge undermines efforts to make UK markets more competitive. Speaking on this, he said: “We strongly advocate that the suspension be lifted urgently to stop the UK falling behind global peers in wholesale market data infrastructure.”
Although this may slow the UK tape operations, it still appears that once authorised, the selected providers will take on a five-year tenure to deliver the tape services. Yet, industry discussion is also turning towards what these ventures will mean and how the future will pan out for the fixed income market. In the US, the Trade Reporting and Compliance Engine (TRACE) has been operational since 2002 and brought a notable increase in transparency and improved reporting for North American fixed income market participants.
This offers a relevant precedent, however, industry sentiment over the past few years has consistently highlighted how a similar system would not be feasible in Europe. This disparity is often put down to differences between the two regions, including European fragmented markets, a variety of currencies and delayed trade data.
A whole new world
Despite possible hurdles to adoption the importance of having a tape has not diminished. While discourse around the prospect increases as reality ticks closer, two key factors are consistently highlighted – the impact it will have on data transparency and its quality.
Due to the primarily over-the-counter (OTC) nature of the bond market, it can often be difficult to gain a good sense of market prices. Almost unanimously, individuals within the fixed income space agree that the tape will benefit the industry and is a vital step in providing innovation by enhancing market intelligence, liquidity analysis, execution benchmarking, compliance surveillance.
Highlighting the advantages of having a CT for bonds, Neil Ryan, chief executive-designate and project lead at BondTape, one of the firms which bid for both ESMA’s and the FCA’s tape, said: “I think that the tape will really drive the fixed income market in Europe and the UK forward, and provide more understanding as to where the data is coming from and how it can be used in systems. So potentially over time it could have a very significant influence, building trust and reliability in the data that’s provided to the market. It’s the start of at least a five-year adventure.”
Additionally, across the industry, eliminating the need to undertake lengthy procedures of cleaning data individually is paramount, and a key benefit that the tape is expected to provide.
Speaking on this, Sharon Ruffles, managing director, head of fixed income dealing, EMEA and APAC at State Street Investment Management, explained: “Up until now, we’ve all been reporting and following a transparency regiment. But it’s kind of like going into a black hole. The data is being stored in a public domain, but there’s 50 plus fields of data that I would need to pull and scrape and clean in order for it to be in any way meaningful.
“That’s what the consolidated tape will do. It will take that data and clean it and give it to me in a format that is readable to me and to my systems and platforms that I use.”
No roses without thorns
Undoubtedly, the introduction of a consolidated tape in Europe and the UK will bring a bounty of benefits to the fixed income world, but as is often the case with new ventures, this also comes with potential obstacles.
As the selection processes have progressed, it has become clear that public authorities are keen to ensure the tapes are commercially viable, meaning that the transparency regime implemented needs to be sufficiently expansive, to ensure that a large number of trades do get published in real time and the value of the tape can be realised. In other words, for bigger trades, if the transparency regime is calibrated in a manner that too many trades are getting deferred, the value of the tape will lower.
Danesh commented on this potential hurdle, stating: “One key challenge that I’m sure was at the forefront of all the bidders’ thought processes was that since this is entirely new commercial undertaking, it’s difficult for all of us to have a solid understanding of what the demand would be. The key thing here is that there is no mandatory consumption, and therefore the tape has to have enough value for everyone wanting to take it. The cost of the tape will be low, but the data coming in is directly linked to the transparency regime. And for that, everything has to be published.”
An additional concern frequently highlighted in conversations around the tape is the governance model. Across the board, market participants have clamoured for a means to influence the evolution of the tape’s service over the five-year period, to reflect changes in market structure over that time. As a result, both the European and UK’s tapes are expected to have advisory committees set up by the CTP, to ensure input from the market is received. The FCA has explicitly set out the requirement for a user consultative body for the UK bond consolidated tape.
Similarly, the prospect of a reasonable commercial basis requirement for data is also a subject of interest for the regulatory bodies. With transparency and data accessibility some of the key advantages a CT is set to bring, ensuring that the price of data remains fair is vital. Since each of the UK and EU tapes will have one provider, eliminating the prospect of having a monopoly on pricing and fees is essential to ensure market participation and adoption, as well as trust and ensuring the overall success of the respective tapes.
However, for Chris Murphy, chief executive and co-founder of ESMA’s CTP, Ediphy, ensuring fair data pricing comes hand-in-hand with providing a tape.
He said: “Our goal with the consolidated tape was always very much that we need to operate it with a utility philosophy in mind. It was already how we were thinking about operating the tape anyway. We want to make sure that we earn a reasonable return for our capital providers. But over and above that we want to make sure that everyone in the industry shares the success of the tape rather than it being for us alone to take advantage of.”
Best of both worlds?
As tapes in the UK and EU draw nearer, discourse also appears to circle back to how the market will react to it, specifically, how prepared the fixed income world is.
The undercurrent of how having two separate tapes will work frequently surfaces, made even more prevalent by Ediphy’s challenge to the UK tender. Dialogue around the suspension has brought about the issue of the UK falling behind, and the EU’s tape being recognised as the authoritative source of bond transparency.
In a statement published online, Danesh said: “The uncertainty discourages innovation and investment in the very fintech ecosystem the government has sought to promote. That risks shifting liquidity and market influence away from London — at precisely the moment the UK is striving to reaffirm its global leadership.”
Additionally, many UK bonds are traded on European venues, and vice versa, so what will this mean for the industry, and more specifically, how will traders be able to navigate this?
Murphy highlighted the importance of ensuring the market is informed and prepared ahead of the tapes’ arrival, commenting: “It’s about engagement with the market on the consumer side, so raising awareness and trying to make sure that people are prepared for this new data set coming, so that they engage with it early on and can see the value in the process.”
As often comes with new developments, the prospect of a tape, or rather, two separate tapes may seem daunting to some in the industry. Speaking on such attitudes, Ruffles commented: “There’s so much uncertainty about what a tape will look like. I think one of the most interesting things is that it’s a consolidated tape, but it’s not consolidated because there’s two of them.
“We’re going to end up with an FCA tape and an ESMA tape and we have to be able to do something with both sets of data and they have different transparency regimes. I can understand why people are scratching their heads.”
This sentiment was also reiterated by Danesh, who spoke to the difficulties and reactionary measures that may be taken to encompass both tapes.
He said: “The whole point of the consolidated tape is to consolidate data by definition. But hang on, there are two of them. Who’s going to consolidate the consolidated tapes? A market participant who wants to see the whole market view of bond trading activity will need to subscribe to both tapes. Our best guess is that there will be data vendors who spring up so that who will subscribe to both CTPs and then provide a single normalised feed to end users.”
The tip of the iceberg?
Although ESMA’s CTP selection has now concluded, uncertainty still remains around what will happen with the UK tape, as well as what will come next from both ventures. Once authorisation is received, official operations will begin, and the providers will begin to coordinate with contributors including trading venues and approved publication arrangements (APAs) to set the development of the tape and consolidation of data into practice.
If the legal challenge is dismissed, the FCA’s contract for Etrading Software is estimated to begin on 5 January 2026 for a five-year period, while once authorised, Ediphy’s tenure will begin. What plays out over the next few weeks and months, as well as those five years, and how the fixed income industry will look by the end of this period is not yet known but as discussed, remains subject to intense dialogue within the industry.
So, what is there to do now? At present, it seems all we can do is sit and wait with bated breath.