ESMA proposes threshold for non-equity consolidated tape rules

Threshold for trading venues will determine which are subject to consolidated tape rules.

The European Securities and Markets Authority (ESMA) has stated that not all trading venues should be subject to consolidated tape rules for non-equity instruments.

In a consultation, ESMA explained the cost of consolidated tape providers collecting information from all trading venues is too high, with limited added value for users.

The threshold will determine venues subject to the rules “both in terms of volume and the number of transactions reported.”

ESMA said this would ensure that not only venues reporting a high volume of transactions are covered in the consolidated tape, but also venues that do not meet the volume conditions.

“Such as certain venues for bonds based on a continuous order book, executing numerous trades but of only little volume,” ESMA explained.

Discussing the consultation, ESMA chair, Steven Maijoor, said the consolidated tape for non-equity instruments “will enable investors to make more informed choices.”

He added: “Having consolidated data available across multiple venues and borders also ensures the protection of investors regardless their location.”

ESMA’s consultation will close on 5 December.