European stock exchanges join forces to offer a consolidated web of stock market information

By Huw Jones

LONDON, Feb 16 (Reuters) – Euronext, Deutsche Börse and 12 other European stock exchanges said on Thursday they would jointly propose the creation of a combined system for transmitting their share prices to investors, challenging rivals as the Union European Union is preparing changes to the regulations.

EU member states and the European Parliament will have to finalize a bill in the coming months that would require exchanges to provide the prices of stock market transactions on their platforms to a “consolidated band” (CT, for its acronym in English ) at a low price so that investors can find the best deals.

Brussels wants to make its capital market more complete and efficient by combining a fragmented stock market scene. The consolidated band has long been a hallmark of Wall Street. Banks and asset managers complain that the price of market data, a key source of money for stocks, is too expensive.

Once the bill is approved, the bloc’s securities watchdog, ESMA, would oversee a process to select a TC provider.

The exchanges, which also include the Nasdaq, SIX Group in Spain and the Vienna, Prague and Warsaw stock exchanges, said they would submit a proposal.

“Participants are recognized specialists in providing reliable, high-quality market data and are well positioned to deliver TC quickly, efficiently and to the highest operational standards,” the exchanges said in a joint statement.

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

The exchanges described the CT proposal as an “elaborate and complex experiment”.

Previous attempts to create a tape failed after exchanges refused to voluntarily provide the data at a price that would make it viable.

The EU bill proposes a tape showing prices “as close to real-time as technically possible”, but exchanges have pushed for a TC with a 15-minute delay after a stock trade, a temporary lag which, according to EU regulators, would not be helpful to investors.

(Reporting by Huw Jones; Editing in Spanish by Flora Gómez)