UK Regulator Proposes Framework for a Consolidated Tape

On July 5, 2023, the U.K. Financial Conduct Authority launched a consultation on a proposed U.K. consolidated tape for bonds. MiFID II introduced requirements for a "consolidated tape" for transactions in equity and non-equity instruments. It requires a consolidated tape provider to collect post-trade information published by trading venues and approved publication arrangements and to consolidate this into a continuous live data stream made available to the public. No consolidated tape has yet been set up in either the U.K. or the EU. The EU announced at the end of June 2023 that political agreement had been reached on the proposals to introduce an EU consolidated tape.

The Financial Services and Markets Act 2023 (which we discuss in our client note, "A Boost for U.K. Financial Services: The U.K. Financial Services and Markets Act 2023") grants the FCA rule-making powers for Data Reporting Service Providers, which will (among other things) enable the FCA to set a framework for the development of a consolidated tape. The FCA's consultation sets out its proposed framework (which allows for only a single CTP for bonds), criteria for how a CTP would operate and the tender process for appointing a CTP. Responses to the FCA's consultation may be submitted until September 12, 2023. The FCA states that it will finalize its rules for establishing a CTP by 2024, and issue the tender in 2024, aligning with the U.K. government's commitment to put a legislative and regulatory regime in place by 2024

The FSM Act also permits the Data Reporting Services Regulations 2017 to be repealed and replaced and HM Treasury is prioritizing the repeal of EU laws relating to the Data Reporting Services Regulations 2017 to facilitate the establishment of a CTP. A near-final draft statutory instrument and related policy note have been published as part of HM Treasury's Delivery Plan for Building a Smarter Financial Services Regulatory Framework for the UK. Comments on the draft statutory instrument may be submitted until August 21, 2023.

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