Market participants will be hit with simultaneous, major technical demands in late 2025 and early 2026 as both the EU and UK update transparency regimes and bring in the long-awaited bond consolidated tape.
The compacted timeline for the changes could pose a challenge for market participants, explained Sassan Danesh and Matthijs Geneste, CEO and head of European regulatory data services at CTP-hopeful eTrading Software.
First, in December, new transparency regimes will be introduced by the FCA and ESMA.
“From a delivery and operational perspective, this is what most people will find the most challenging to adapt to at about the same time,” Geneste predicted.
Then, expected in Q2 2025 is the introduction of the consolidated tapes.
“Market participants might not want the UK and EU CTs to go live at the same time, because they just don’t have the technical resources to onboard both simultaneously,” Danesh suggested. “But deciding which jurisdiction to prioritise first is a. very sensitive topic.”
He continued: “We’re spending a lot of time thinking through the implications, looking at time and integration plays. Maybe there should be an aggregator, a consolidator of the consolidated tapes. That could bring together the current regulatory technical standards and transparency regimes, then flip over to the new ones when the CTs go live.”
With these significant regulatory changes happening concurrently, the market will have to adapt to a continuously evolving landscape.
Danesh said, “At various points, it will be the new UK transparency regime with the old EU one, and we’ll see every permutation of sequencing all the way to live intraday CTs. We need to help market participants move through these very interesting 15 months.”
eTrading Software has recently submitted its first tender documents to ESMA, and is now waiting for the FCA to begin the tender process – which was delayed once again last week.
READ MORE: CTP tender process delayed again
There are a number of divergences across the jurisdictions. In the EU, there is more scope for bidders to differentiate themselves early on. Danesh explained: “In the UK, the FCA is defining its vision for the CT operator and then it will be a reverse auction process. It is purely based on price. There is no opportunity for the CT operator to say, ‘if we do it this way, we can do it even better’.”
There are also differences in regulatory scope. In the UK, sovereigns are covered under the upcoming transparency regimes.
“For soverigns, the EU has quite a complicated deferral regime with an opt-in methodology for certain jurisdictions and quite a prolonged deferral,” Geneste noted. “It is difficult to completely predict how it would work out in practice.”
Despite the different approaches on either side of the channel, eTrading Software are continuing to develop the two tapes in tandem.
Geneste told The DESK: “On the back end, the technology that we’re developing for both CTs will be roughly the same. There has been some divergence on, for example, the transparency rules and on the different reportable elements that go into the tape, but it’s not very significant. If we win both mandates, we can create an economy of scale. It can be much more efficient.”
“We very strongly believe in the role that the CT can play as an integrator rather than a major disruptor. How does it fit into the existing market structure and infrastructure? We see it as playing a very important role in feeding data into existing infrastructure, such as order and execution management systems, to speed up time to market.”
Danesh argues that the CT should be part of the market plumbing for firms to build on.
“We’re providing the enablement for a competitive ecosystem to arise on top of this market infrastructure,” he said. “People should be subscribing to it, then doing all the fancy stuff – statistical models and AI – on top.”
With the EU’s tender process in full swing and the UK’s expected to start next month, there are still questions to be answered around implementation and the total scope of both jurisdictions’ tapes.
On others in the running for CT provider – TransFICC, fairCT and Bondtape – Danesh said: “All the vendors are credible, which is good news from an end user and the regulators’ perspectives. Whichever of us is chosen, they can have some comfort that there’s a certain level of competence that will stand everyone in good stead.”
©Markets Media Europe 2025
