Google, UBS, and Norway’s Wealth Fund Join Forces in Bid for UK Bond Tape Control

A high-profile consortium of financial heavyweights, including Google Cloud, Swiss banking giant UBS, and Norway’s sovereign wealth fund, has united in a bid to operate the UK’s anticipated real-time bond trading data feed. This ambitious endeavor, spearheaded by fixed income technology firm Ediphy, aims to bring greater transparency and efficiency to the UK’s bond markets.

The move comes as British regulators push forward with plans to introduce a “consolidated tape,” a centralized system for collecting and disseminating market data across both stock and bond trading venues. The bond data feed is slated to launch first, with the goal of providing investors with a comprehensive view of pricing and trading activity, ultimately enhancing the attractiveness of UK capital markets.

Historically, bond trading has been fragmented across multiple platforms and often conducted bilaterally, resulting in limited price transparency and information asymmetry. This lack of a consolidated view has disadvantaged some market participants while providing others with an informational edge.

Ediphy, a London-based company specializing in fixed income technology, announced its bid to become the UK tape operator on Wednesday. The company has assembled a diverse coalition of partners, including Cboe Global Markets, FactSet, TP ICAP, Google Cloud, and notably, Norway’s influential sovereign wealth fund.

Chris Murphy, CEO of Ediphy and former head of Global FX, Rates, and Credit business at UBS, emphasized the importance of a collaborative approach, stating that the initiative aims to avoid “optimizing for a vested interest in the market.” He stressed the need for affordability, timely data submission from participants, and a balanced regulatory approach to ensure the bond tape’s success.

The prospect of a consolidated bond tape has garnered widespread support from regulators and investors eager for greater transparency and efficiency. However, it has faced opposition from some exchanges reluctant to relinquish control over their lucrative data feeds. Additionally, banks and asset managers have expressed concerns about the comprehensiveness of the data, emphasizing that their participation is crucial for its accuracy and value.

The UK’s Financial Conduct Authority (FCA) plans to initiate a formal tender process for selecting the bond tape operator by the end of 2024, with an anticipated launch date in late 2026. This ambitious timeline underscores the FCA’s commitment to modernizing the UK’s bond markets and attracting greater investment. The involvement of industry giants like Google, UBS, and Norway’s wealth fund adds considerable weight to the bid and signals a potential turning point in the push for greater transparency in fixed income markets.