The FIX Trading Community has proposed a new set of recommendations for the European consolidated tape (CT), to address issues of data quality, transparency and the attractiveness of European markets.
FIX proposes four reforms to ensure the European CT helps to resolve these obstacles and close gaps across the markets.
Specifically, these include: suppressing non-informational, technical and cross-border duplicative reports, introducing the Closing Auction flag in the EU, ensuring execution method transparency and clarifying reporting obligations.
Detailed in the association’s most recent whitepaper, ‘FIXing Europe – how the European consolidated tape can radically improve the image of European capital markets,’ challenges such as non-mandated reporting of some non-price forming transactions are highlighted as key pain points impacting investor interest in Europe’s markets.
Jim Kaye, executive director of FIX, said: “Today, investors assessing the European market will completely discount up to one-third of volume because of the way trades are reported […] activity taking place off-venue, for example in systematic internalisers, is discounted, whereas in the US is it counted and accounts for almost half of the entire market.”
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Additionally, the whitepaper recommends making the proposed reforms regulatory, to implement consistency in application across market participants, as well as ensuring updated guidance documentation is provided by regulators.
The four proposals aim to be cost-effective and technically feasible, to ensure that firms are able to implement them smoothly and effectively, and also notably are supported by international precedent, said FIX.
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Kaye further indicated that the outlined reforms will reflect long-term work from the Global Technical Committee and European CT working groups.
“FIX has been working for years with participants from all segments of the market on the issues that face European markets. The introduction of the ECT is the perfect moment to fix a number of major issues once and for all and allow the EU market to show off its full potential for the first time.”