20 years ago, the first Market in Financial Instruments Directive was hailed by UK minister Ed Balls as bringing the benefits of competition to equity trading data. “From November 2007, the Government will no longer require transactions in shares admitted to trading on a regulated market under MiFID to be reported to that market”, he told Parliament. “This will allow new providers of transaction reporting services to enter the market more easily”.
We know what happened next. The market fragmented, and data became incomplete and more expensive. Just a year after MiFID I was implemented, the Investment Management Association complained on behalf of its buyside members, calling for a consolidated tape. Many years of distractions such as the global financial crisis and Brexit followed, but this week, the UK FCA finally announced…an equity consolidated tape.
In its consultation paper, the FCA said that the tape would bring benefits of up to £150 million over the next ten years. What they didn’t say is how much not having a consolidated tape cost the industry over the last 20 years. It was certainly a lot more than £150 million.
