Exclusive-Exchanges will be forced to show hand on trade prices – EU document By Reuters

By Huw Jones

LONDON (Reuters) -Stock exchanges across the European Union will be forced to hand over data on market transactions on a single “tape” for investors to spot the cheapest deals and help the bloc compete better with London following Brexit, according to a draft EU document seen by Reuters.

The proposal is part of a welter of reforms from the EU’s executive European Commission due next week to bolster capital markets after the loss of London last year when Britain left the bloc.

A so-called “consolidated tape”, a record of trading prices that is a feature of Wall Street, has been a longstanding goal of banks and asset managers who face a plethora of venues which trade the same securities.

Exchanges, however, have resisted handing over the data at an affordable price.

There would be mandatory contributions from exchanges to a tape for stocks and bonds in return for “fair remuneration”, the document said.

“All market data sources would have to make standardised core market data available to market data aggregators,” the document seen by Reuters said.

Exchanges would be guaranteed a “minimum revenue” for handing over the price data, the proposal said.

The proposal for new legislation includes other reforms, including scrapping a requirement on clearing houses to handle derivatives traded on rival bourses – a move that could disadvantage London.

“The Commission deems it necessary to remove these provisions in order to foster competition… and building further clearing capability in the EU,” the document said.

Brussels wants to expand the clearing or processing of trades to make it attractive for banks to move trillions of euros of such business from London to continental rivals such as Frankfurt.