Last week’s MiFID Forum in London saw Guy Sears, director of Wholesale at the Investment Management Association (IMA), warn attendees of the dangers of leaving it up to lawyers or regulators to decide on the best data standards for use within the context of MiFID reporting. He indicated that such a move is potentially damaging to the efficiency of the market, given their lack of expertise in the practical use of these standards in a business context (a point that has been made by many of late with regards to regulatory intervention in the standards space).
Sears also noted that the buy side has been calling for a consolidated tape for some time and the IMA first asked the industry to provide a solution three years ago. “We may refer to what we call the ‘industry’ or the ‘market’, but there is no such thing. All players in the market have their own concerns and their own priorities,” he added. The notion of the ‘industry’ developing a solution without a significant incentive for the main players involved is therefore likely to be doomed to failure.
“We should try to achieve an industry led consolidated tape, but we need to be aware it will not be an easy thing to achieve,” he said. “We also need to ensure that the people that use the standards are the ones that specify those to be used within the context of a consolidated tape.”
Getting the right standards for market infrastructures is a common theme throughout the market at the moment, whether it be the consolidated tape for market data, or the identification of counterparties and clients within a reference data utility. Providing feedback to the regulatory community and engaging in the standards debate is a priority, if the industry is to avoid further complexity and cost from future compliance requirements.
To this end and in the context of the consolidated tape, industry standards body FIX Protocol is seeking to lead the charge for a “neutral” industry governed solution that represents the “breadth” of the industry (rather than a commercially driven one – a la NYSE Technologies’ recent bid), according to Chris Pickles, head of marketing for Financial Markets & Wholesale Banking at BT. He told attendees to the MiFID Forum that FIX Protocol is therefore planning to create a consolidated tape delivery authority in order to oversee the operations of such a utility, with a democratically elected executive in charge. Such a body would also be in charge of setting the technical standards in terms of both technology and business processes, he said.
FIX Protocol will be holding a meeting before the Christmas break in order to discuss these plans, check out its website here for more details.