UK watchdog says addressing uncertainty over bond market 'tape'

Tradeweb Markets

27/02/2024 16:40

By Huw Jones
       LONDON, Feb 27 (Reuters) - Britain's markets watchdog
said on Tuesday it was optimistic there would be "decent
bidders" to operate the country's first single real-time feed of
bond prices after a heavyweight consortium abruptly threw in the
towel in December.
    Britain plans to launch the public bidding process for a
"consolidated tape" operator for bond prices later this year,
said Jon Relleen, director for market infrastructure at the
Financial Conduct Authority (FCA).
    Wall Street has long had "tapes" for stocks and bonds to
increase market efficiency by making it easier for investors to
find the best deals across different platforms, and the European
Union is also looking to introduce them as well.
    In December, a consortium of three big players in the bond
market, Tradeweb, Bloomberg and MarketAxess, said it was no
longer planning to jointly bid to become a bond tape operator,
citing "structural complexities" and "uncertain" outcomes
regarding product definitions.
    "We are hopeful that we'll get some decent bidders," Relleen
told a conference organised by markets industry body AFME.
    He is studying "valuable new information" as he considers
incentives, such as the level of fees a tape provider would pay
to data suppliers.
    "We're also very mindful that we're going into trying to
judge those incentives. I'd be lying saying there wasn't some
residual uncertainty as we go through that process," Relleen
said.
    He said there were inter-linkages between the tape and
separate moves by the FCA to improve the quality of transparency
in bond trading data, given that the value of tape would be
higher if the data is better.
    The FCA is also planning a tape for stock prices but this is
a longer term project, Relleen said.

 (Reporting by Huw Jones
Editing by Mark Potter)
 ((huw.jones@thomsonreuters.com; +44 207 542 3326; Reuters
Messaging: huw.jones.thomsonreuters.com@reuters.net))