The seismic impact of post-trade transparency in bond markets
Whether it is sub-optimal trading decisions or questionable execution practices, it is fair to say a lack of reliable, comprehensive and accessible bond transaction data in the EU and UK creates a series of challenges for many market participants.
Implementation shortfalls, missed trading and investment opportunities are just three examples.
Not all market participants are impacted equally however. Currently, smaller market participants, without the deep pockets to purchase expensive data, suffer the most from this lack of transparency.
This European situation is analogous to the U.S. market prior to the introduction in 2002 of TRACE, a consolidated tape of bond transaction data. Since then, TRACE data in the U.S. has measurably narrowed spreads, reduced investor costs and contributed to improved valuation accuracy.
Both the UK and EU plan to introduce their own consolidated tapes, targeted for Q2 2026, and have the opportunity to learn from the U.S. experience.
The success achieved by TRACE was a direct result of the democratisation of access to transaction data without the licensing complexities of alternate solutions. A critical factor in this success has been the large array of channels through which TRACE may be consumed. Relatively few market participants consume the data directly. Most use established intermediaries (data vendors, OMS, EMS, PMS platforms etc.) as they represent paths of least resistance and, additionally, they offer cleansed data feeds which support the myriad use-cases where ‘raw’ TRACE data is inadequate.
Applying this experience to the EU and UK regulators’ projects requires the active promotion of intermediaries through whom cleansed data can be made available at a low cost and with simple, standardized licence terms.
That is why we have launched our ETS Connect Premium service, to provide cleansed aggregated EU and UK real-time bond post-trade transparency data. Furthermore, in order to promote the regulators’ democratisation objectives, we are offering the service for free throughout 2025 and on a cost plus basis from 2026, using standardised licence terms. In Q2 next year the service will migrate its inputs to the EU and UK bond consolidated tapes, mirroring the market model already established in the U.S.
Our ETS Connect Premium service is available to the end-user, but critically, also to established intermediaries, whether they are data vendors, OMS, EMS, PMS platforms etc. We believe our service provides the optimal approach to achieve the industry’s and regulators’ common goal of democratizing data via a single access point for cleansed data at a low cost and using standardised licence terms. Our belief is based on our experience as an independent fintech that has had the privilege of working closely with multiple regulators over many years and our experience in offering multiple existing services in the transaction and reference data space.
Sign up to ETS Connect Premium today for free.
For more information email Karl.Wyborn@ets-connect.com
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