ETS Connect UK Introduces Real-Time Bond Market Data Aggregation

The UK has launched its first bond consolidated tape, providing a single, real-time source of bond market data for investors and market participants.

The UK financial market has reached a significant milestone with the launch of its first bond consolidated tape operated by ETS Connect UK. This innovative service aggregates real-time bond trading data from multiple sources, offering an unprecedented level of transparency and efficiency.

The initiative follows recent changes to the UK’s bond market transparency rules, which have already shown substantial improvements in data reporting.

Until this launch, bond trade data was scattered across various platforms, making it challenging for investors to gain a comprehensive view of market activity.

The new consolidated tape brings all this information together in one place, providing a single source of truth for bond market participants. This development positions the UK as the first country outside North America to introduce such a solution for bonds.

Enhancing Market Transparency and Efficiency

The launch of the bond consolidated tape is part of a broader initiative to enhance the competitiveness of the UK’s financial markets. The service covers 98% of in-scope bond trading, offering extensive market coverage. The Financial Conduct Authority (FCA) will supervise ETS Connect UK throughout its 5-year contract to ensure data quality and reliability.

Simon Walls, executive director of markets at the FCA, highlighted the importance of this development: ‘Good markets run on good information. Today’s launch of a consolidated tape gives investors a clear, reliable and comprehensive view of UK bond trading for the first time.’ The service is expected to improve price discovery, support liquidity, and strengthen the efficiency of the bond market.

Industry Reactions and Future Prospects

The introduction of the bond consolidated tape has been met with enthusiasm from industry leaders. David Raw, Managing Director for Markets at UK Finance, stated that the UK stands to benefit significantly from this development. Bryan Pascoe, chief executive of the International Capital Market Association (ICMA), emphasized the importance of the consolidated tape as an accessible and affordable source of post-trade data.

Victoria Webster, Managing Director – Fixed Income at Association for Financial Markets in Europe (AFME), noted that the tape can improve price discovery and support liquidity. Hugo Gordon, Head of Capital Markets at the Investment Association, welcomed the launch as a significant moment in the development of UK capital markets. The FCA is also working on delivering a consolidated tape for equities, further enhancing the transparency and competitiveness of the UK financial markets.

The Role of ETS Connect UK and Legal Support

ETS Connect UK was appointed following a competitive tender process launched in. The service operates under a 5-year contract, supervised by the FCA against standards on data quality, completeness, and timeliness. Travers Smith LLP played a key role in establishing the contractual infrastructure underpinning the consolidated tape, drafting critical contracts and standard terms.

James Longster, Partner in the Technology & Commercial Transactions team at Travers Smith, commented on the significance of the project: ‘It’s been a privilege to help ETS Connect to deliver this pioneering market infrastructure for the UK. The consolidated tape will transform transparency and efficiency in the bond market.’ The successful launch of the bond consolidated tape marks an important step forward for the UK’s financial sector, enhancing its global reputation as a leading center of finance.