Former Department of Finance official Neil Ryan has been tapped to lead a bid by Bloomberg and two other companies to dramatically boost the transparency of more than €100 trillion of annual trading of EU government and company bonds.
Bloomberg, the financial information and news group, and two trading platforms, MarketAxess and Tradeweb, said on Tuesday that they plan to set up a joint venture company in the EU that will seek to provide a central feed for bond trading in the union.
The three US companies have selected Irish-led, but UK-based financial data management company Finbourne Technology, where Mr Ryan is a consultant, to build and operate the feed, which is known in financial markets as a consolidated tape, for the new company. Mr Ryan will lead the initiative.
Mr Ryan, a former executive with UBS and Wells Fargo, was among a number of banking experts hired by the Department of Finance during the financial crisis. He left the department in 2016, after five years.
As things stand, EU bond trades are reported to about 170 trading venues, including exchanges and multilateral trading facilities, making it difficult for investors and other market participants to get a clear view of activity. A consolidated tape would see prices reported to these venues also recorded in a centralised system.
The EU is working on rules to allow for the setting up of such tapes covering the trading of bonds, shares, derivatives and exchange traded funds as it seeks to improve the availability of information and create a more competitive capital market. There are already stock and bond tapes on US markets, and the UK is also considering a bond, or fixed income, market tape.
It is expected that the European Securities and Markets Authority will start off by seeking tenders next year from parties interested in providing a consolidated tape, or centralised price feed, for bond transactions. This is subject to rules on consolidated tapes being agreed by the European Parliament and EU member states in the meantime.
The planned new joint venture is expected to have competition from UK tech company Etrading Software, which is backed by Lloyds Banking Group, and others in the tender process.
“The time has come to provide the European fixed income markets with a consolidated tape that is led by an initiative with deep experience in low-latency data processing, cleansing, consolidation and publishing within a regulated framework,” said Mr Ryan. “Our motivation is to improve transparency and spur electronification in the fixed income space.”
