A properly calibrated consolidated tape will benefit EU capital markets and economic competitiveness
Brussels, Belgium – MFA calls for the swift implementation of a properly calibrated consolidated tape (CT) in the European Union in a comment letter to the European Securities and Markets Authority (ESMA) today. The letter is in response to the consultation package on technical standards related to consolidated tape providers (CTP) and data reporting service providers, and assessment criteria for the CTP selection procedure.
“Successfully implementing a consolidated tape in the EU will enhance capital markets, improve the bloc’s economic competitiveness, and drive investment into Europe” said Bryan Corbett, MFA President and CEO. “It is important to properly calibrate the consolidated tape so market participants can benefit from access to a ‘golden source’ of timely and accurate data.”
MFA’s letter highlights how implementing a well-structured CT in the EU will improve access to timely and accurate market data. This will benefit EU capital markets and economic competitiveness. Access to accurate market data is important to alternative asset managers’ investment strategies and operations. Alternative asset managers use the data to execute complex trading strategies, monitor execution quality, meet regulatory reporting requirements, and determine asset valuation, among other tasks. Improving access to market data will empower alternative asset managers, and other market participants, to better serve their investors, including pensions.
The letter also emphasizes that a properly calibrated CT must provide fairly priced and reliable data and have flexible offerings:
For the EU CT to be successful, MFA urges ESMA to require that the CT provide, in addition to fair pricing and reliable data, flexibility in CT offerings so that managers need only subscribe to the data sets that they need for their own pre-defined uses. No manager should be obligated to accept an “all or nothing” option to subscribe to the CT, but rather, MFA urges that the CTP offer “a la carte” pricing where managers can determine the data sets, they need and subscribe to those CT class(es) accordingly. It is important for MFA members that the CT be successful: despite the fact that managers today obtain trade data from other sources, and any CT will necessarily be competing with the legacy data sources currently in use, a consolidated “golden source” of trade data for fixed income, equities, and fixed income will greatly enhance the ability of subscribers such as private funds to perform important risk, reporting, and compliance functions.
Read the full comment letter here.
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About the global alternative asset management industry
The global alternative asset management industry, including hedge funds, credit funds, and crossover funds, has assets under management of €5 trillion (Q3 2023). The industry serves thousands of public and private pension funds, charitable endowments, foundations, sovereign governments, and other global institutional investors by providing portfolio diversification and risk-adjusted returns to help meet their funding obligations and return targets.
About MFA
Managed Funds Association (MFA), based in Washington, DC, New York, Brussels, and London, represents the global alternative asset management industry. MFA’s mission is to advance the ability of alternative asset managers to raise capital, invest, and generate returns for their beneficiaries. MFA advocates on behalf of its membership and convenes stakeholders to address global regulatory, operational, and business issues. MFA has more than 180 member fund managers, including traditional hedge funds, credit funds, and crossover funds, that collectively manage over €3 trillion across a diverse group of investment strategies. Member firms help pension plans, university endowments, charitable foundations, and other institutional investors to diversify their investments, manage risk, and generate attractive returns over time.
