The Financial Conduct Authority unveiled the scope of a new single data feed for UK equities trading on Friday [1, 2].
This initiative seeks to stimulate activity on the London Stock Exchange by providing a more comprehensive and unified stream of trading data [1, 2]. By consolidating information, the regulator intends to remove barriers to market entry and increase the overall liquidity of the UK equity market [1, 2].
The FCA is targeting a timeline of 18 months to launch the consolidated trading data feed [2]. The move is part of a broader effort to modernize the UK's financial infrastructure, a step seen as critical for maintaining the global competitiveness of the City of London [1, 2].
Currently, trading data can be fragmented across different venues, which often complicates the process for investors and firms attempting to get a full picture of market activity [1]. The new feed aims to publish more trading data to provide a transparent, single source of truth for equities [1, 2].
By streamlining how data is disseminated, the regulator hopes to attract more high-frequency traders and institutional investors back to the UK market [1, 2]. This transparency is expected to reduce the cost of data acquisition for smaller firms, potentially leveling the playing field between boutique traders and global giants [2].
The project will involve coordinating data from various trading venues to ensure the feed is accurate and timely [1]. While the technical specifications are still being finalized, the FCA said that the scope of the feed will cover a wide array of equities trading activities to ensure maximum utility for market participants [1, 2].
“The FCA is targeting a timeline of 18 months to launch the consolidated trading data feed.”
The transition to a consolidated tape is a strategic attempt to modernize the UK's market structure to compete with the US and EU. By reducing data fragmentation, the FCA is attempting to lower the operational costs for traders, which could potentially reverse the trend of capital migrating away from the London Stock Exchange toward more digitally transparent markets.
