Head of Real Time Market Data @ Euronext
Mike Hodgson has worked in the market data industry for over 30 years currently as Head of Real Time Market Data at Euronext and in a variety of data related roles at Thomson Reuters, UBS and London Stock Exchange. I also worked on the BATS / Chi X commercial model for market data back in 2011.
I think it’s a very good point to ask what we are trying to achieve with the creation of a consolidated tape in Europe.
The debate currently focuses on cost of market data and how revenue generated by the tape will be shared out.
What seems to have been lost is what we are trying to achieve.
Currently the data vendors provide solutions for Lit markets in Europe but struggle with the OTC data. So there is some form of both pre and post consolidation.
When we look at the use cases – currently these use cases exist and are satisfied by either in house or 3rd party solutions. Most striking point is the use cases don’t need real time data.
So if users want a view of what has happened across then we would recommend creating a end of day database containing all trades – and best price and volume available at the time of the trade. This could be low cost to access and would achieve the goal of democratizing access to data to all users.
Focus would then be on the product rather than on market data costs or revenue sharing.
Create a real time tape and the costs are significantly higher. The larger players in the market will still connect for data and trading directly to the markets. The tape won’t be suitable for trading purposes due to latency and geography – if you are sat next to the tape you will get the data faster than someone sat further away.
The debate around CT has been hijacked to some extent by the argument around the cost of market data. This is grabbing the headlines – but Euronext believe the Europe stagnating because of market data costs – MiFID 1 introduced competition between trading platforms that now means there are over 300 potential trading venues or markets in Europe.