With a view to boosting equity market transparency and bolstering investor confidence, the U.K.’s Financial Conduct Authority (FCA) is consulting on a series of reforms to enable the launch of a comprehensive market data feed in the coming 18 months.
On Friday, the FCA issued a pair of consultation papers setting out a package of proposed reforms designed to improve transparency. The reforms propose a framework for launching a consolidated tape for U.K. equity markets, adopting an interim reporting tool and undertaking certain market structure reforms.
The regulator said that currently equity markets are “functioning effectively” but that the fragmentation of trading — which has delivered the benefits of competition and innovation — has also added unwanted complexity and difficulty in assessing market activity.
It’s aiming to address those issues with the planned introduction of consolidated equity market data in the months ahead.
“A consolidated tape will make it simpler and easier for investors to see the whole market picture. Today’s package settles the big design questions and sets the path to deliver the tape within the next 18 months,” said Simon Walls, executive director of markets at the FCA, in a release.
Among other things, the consultations also set out how market quality will be monitored and seeks feedback on the metrics that regulators should use.
“We welcome the FCA’s package and the completion of the equity consolidated tape design,” said Hugo Gordon, head of capital markets at the U.K.’s Investment Association, in a release.
“By bringing together both pre-and post-trade data from across the market into a single source, the tape will improve access to market-wide data and support more transparent and efficient U.K. capital markets,” he added. “The focus can now shift towards successful delivery and implementation.”
Last month, the FCA launched a consolidated tape for the U.K. bond markets. Taken together, the regulator said that these efforts aim to improve transparency, investors’ access to information, and investor confidence.