The Financial Conduct Authority has launched a consultation on changes it hopes will increase investment and liquidity in UK equity markets.
It wants to introduce a ‘UK equity consolidated tape’ which would bring data from across UK markets together giving investors a clearer view of the market.
The regulator said at the moment it can be challenging to assess overall market liquidity “causing it to be underestimated”, as UK equity trading is spread across multiple trading venues.
The consultation, launched today (November 19), said there are two main outcomes the FCA is seeking by introducing the consolidated tape.
The first is to increase the use of UK equity trade data across a wider range of market participants and second is to provide a “clearer, more comprehensive” view of UK equity market liquidity to all market participants.
Simon Walls, interim executive director of markets at the FCA, said: “UK markets offer diverse trading options which can be great for competition, choice, and lowering trading fees. But this landscape makes it harder to assess liquidity as a whole in our markets.
“The equity consolidated tape seeks to tackle this challenge head on by delivering more straightforward access to equity market data from across venues, supporting better decisions and boosting market participation.”
The FCA hopes that the changes could lead to greater participation in UK markets, and increased liquidity.
The consultation is seeking feedback on introducing a tape that includes both post-trade data and the attributed best bid and offer prices (the first level of pre-trade data) across UK trading venues.
It includes a total of 48 questions, including asking for feedback on what pre and post-trade data should be included.
The equity tape is expected to be ready by 2027 and the regulator has committed to reviewing it after two years of operation to assess effectiveness, including whether pre-trade data levels should be varied.
tara.o’connor@ft.com
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