Benefits of Implementing a Consolidated Tape for Bond Liquidity Fragmentation

A consolidated tape (CT) is a much-needed mechanism to address liquidity fragmentation in European and UK bond markets. Both the European Securities and Markets Authority (ESMA) and the UK Financial Conduct Authority (FCA) have recently advanced their efforts to implement viable solutions. Bonds are a highly diverse universe, different from equities and ETFs, and recent regulatory progress around bond type definitions, regulatory and core data, deferral regimes, and data quality improvements are crucial steps in this direction. The goal of a fixed-income tape should be to aggregate and provide democratized access to market data, according to Chris Murphy, CEO of Ediphy.