European stock exchanges join forces to drive share price flows

Euronext, Deutsche Boerse and 12 other European exchange groups said on Thursday they would jointly propose the creation of a combined feed of share price flows to investors, throwing down the gauntlet to rivals in the face of EU regulation.

EU states and the European Parliament are due to finalise a legislative proposal in the coming months that would oblige exchanges to provide prices of stock transactions on their platforms at a low-cost “consolidated tape” (CT) for investors to discover the best deals.

Brussels wants to make its capital market deeper and more efficient by stitching together a fragmented trading landscape. A band has long been a feature on Wall Street. Banks and asset managers complain that the price of market data, which is a key factor for stock markets, is too expensive.

Once the bill is approved, the bloc’s securities watchdog ESMA would oversee a selection process for a CT provider, and the exchanges, which also include Nasdaq, SIX Group in Spain and exchanges in Vienna, Prague and Warsaw, said they would submit a proposal.

“The participants are recognised specialists in providing reliable and high quality stock quote flow and are well positioned to deliver a CT quickly, efficiently and to the highest operational standards,” reads a joint statement.

“The project will focus on providing a tape designed to provide a comprehensive, standardised and consistent source of market data and will seek to work with regulators to develop the optimal solution for investors.”

Stock exchanges have called the CT proposal an “elaborate and complex experiment”.

Previous attempts to build a band failed after exchanges refused to voluntarily provide data at a price that would make it profitable.

The EU draft law proposes a tape showing prices that are “as close to real time as technically possible”, but exchanges have lobbied for a CT with a 15-minute delay after a stock transaction, a time gap that EU policymakers say would be of no benefit to investors

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