Sears: Euro Consolidated Tape Won't "Just Happen"

Speaking at the Mifid Forum in London yesterday, Guy Sears, director of wholesale at the Investment Management Association (IMA), delivered an illuminating address on the upcoming Mifid review.

"Mifid is an important directive for the buy side, but perhaps not the most important," he joked.

Commenting on the consolidated tape, a key aspect of the review which would allow for real-time reporting of prices and volumes of all stocks listed on a trading venue, Sears expressed his disappointment that previous calls from the buy side for a solution were not heeded by the UK's Financial Services Authority (FSA).

"Three years ago, we raised this with a senior member of the FSA. The things we asked for in that meeting and the follow up letter, are exactly what is being asking for now, almost three years on. We don't think people listened," he said.

Addressing whether the development of a consolidated tape will be market-led, Sears was cutting, pointing to the fact that in an industry where all parties are "quite rightly" concerned with their own business, it will be extremely difficult to get a solution.

"Frankly, the industry has missed the train - we're not going to just ‘get' a consolidated tape. Unless they're foolish, powers will be taken by the European Commission to mandate this."

"I Just Don't Care"

Although a consolidated tape was of interest to Sears, other features of the Mifid review were not so lucky - in particular, discussions over the exact percentage of trades being executed on MTFs and dark pools.

"Forty percent, thirty-eight percent, five percent, I just don't care. I don't care because securing a figure doesn't correlate to any need of investors," he said.

"When selecting venues the buy side cares about liquidity, cost and resilience to shocks," said Sears. "Which is why it's no good telling us to go onto a transparent market if there's less liquidity."

Drawing his candid speech to a close, Sears was tongue-in-cheek about buy-side expectations of the Mifid review. "What does the buy side want? Well, we want to have our cake and eat it and we're hopeful that the Mifid review will give us that."

BST Analysis
The Mifid review meeting, hosted at Bloomberg's UK offices on Dec.1, was run by the Mifid Forum, a joint working group, formed to allow market participants to evaluate the business and technology impacts of Mifid. Discussions on the day focussed on auditing, compliance and regulation.