Just when I was hoping to start thinking about the Christmas holidays (beginning with the first of the season’s parties this week) we’ve seen a bunch of announcements on the European consolidated tape, including those from FPL and The COBA Project.

Everyone acknowledges that the lack of an agreed tape of record makes any concept of true best execution pretty meaningless and yet, five years on from the introduction of MiFID, there still seems little sign of progress. The two announcements this week claim to be industry-led solutions, but neither has the complete backing of the market and neither solves the fundamental problem that continually seems to get kicked down the road. For a more detailed analysis you can visit the Regulation Matters website, but basically the issue centres on who the data belongs to anyway. Is it the investment managers that make the buy/sell decisions, the brokers who execute and, in some cases, match orders, or the venues that list the stocks in question and match order flow too? This has a crucial bearing on who should actually pay for this data and then how much. The Eurocrats seem vague on all this and yet they state that if commercial providers don’t step in to provide such a consolidated tape at “reasonable cost” then they will take matters into their own hands. Worse still, they seem to mix up the post-trade requirements (that are required for proving best execution) with the real-time situation which firms have solved already to reflect the venues they wish to spread their orders across.

It’s a shame because the industry has done a lot of the hard work in agreeing the rules by which such a tape should be compiled through the MMT. This is the standard that both FPL and COBA hail as their Eureka contribution to the problem. Without real alignment on who pays who for what, though, I imagine we will still be warming our hands on this one for years to come…