The European Securities and Markets Authority’s (ESMA) Securities and Markets Stakeholder Group (SMSG) has reaffirmed its support for a consolidated tape, but outlined ways ESMA’s proposed Advisory Committee managing the consolidated tape provider could be reformed.
The SMSG, in its advice to ESMA over the European regulator’s MiFIR review package on consolidated tape providers consultation paper, said a consolidated tape will “democratise access” for all investors and contribute to the creation of a truly pan-European market and Capital Markets Union.
“These tapes will make cross-border investments easier through the creation of a truly (albeit virtually) integrated pan-European market, which will ultimately benefit corporates when raising capital and investors when allocating their savings,” the paper noted.
Robust governance structures are essential to the development of a consolidated tape, the SMSG added, and it should be governed in a way that reflects the interests of all stakeholders.
But ESMA’s proposed Advisory Committee is unlikely to provide sufficiently strong governance of the consolidated tape provider and the SMSG suggested that ESMA consider expanding the governance requirements set out in the regulator’s consultation paper.
The SMSG believes the board of the consolidated tape provider (CTP) would ideally include broad stakeholder representation including data users, data contributors and vendors. This representation should be proportionate, SMSG said, and there would ideally be permanent representation of, and voting rights for, the European Commission and ESMA on the board of the CTP.
The board, including stakeholder representation, would also ideally have voting rights, and right of veto, on decisions relating to pricing policies/fees, revenue sharing scheme, the ease of use of licensing policies, data content, its standardisation and quality, speed and connectivity. Lastly, a robust conflict of interest policy should be in place to help manage the governance.
©Markets Media Europe 2024
