Authored by Sybille Mueller, Director, Streets Consulting
The TradeTech conference would simply not be complete without a deep-dive discussion about the consolidated tape (CT). Our team was on the ground at the conference in Amsterdam, listening to the latest debates, and here are our key insights into how this critical piece of market infrastructure is evolving.
While the CT represents a highly anticipated and transformative development for European equities, it is widely acknowledged that the tape alone is not a ‘silver bullet’. It must be combined with broader reforms addressing risk culture, scale, and retail participation to solve Europe’s capital markets challenges. However, its core purpose remains vital. Europe has successfully driven down trading costs by introducing competition, but this has naturally led to the dispersion and fragmentation of trading interests. The CT aims to aggregate this fragmented landscape into a single, comprehensive view, democratising market access for retail investors while helping smaller institutional investors enforce better discipline on their brokers.
Navigating the Complexity: Addressable Liquidity and the Retail Illusion
Building the CT is fraught with complex market structure challenges. The most prominent hurdle is the ongoing debate over what actually constitutes ‘addressable’ liquidity, an issue that has dominated conversations since markets first fragmented under MiFID. The industry suffers from overlapping and confusing terminology, frequently bouncing between classifying liquidity as “addressable,” “actionable,” “available,” or “accessible”.
This lack of definition leads directly to the risk of a ‘retail illusion’. The tape is often framed as a democratising tool designed for everyone, but if it simply aggregates all market volume into one single number, it risks including tiered, bilateral liquidity that everyday retail investors cannot actually access. As panellists pointed out, giving retail investors a false sense of accessible liquidity is entirely counterproductive to the goal of democratisation. Furthermore, creating a clean, unified tape is heavily hindered by the fact that different firms currently apply differing legal interpretations to trading tags, resulting in inconsistent data reporting across the industry.
The Tipping Point: Protecting Reference Prices in a Fragmented Market
There is also a broader structural concern regarding a potential reference price tipping point. As more flow fragments away from lit exchanges into periodic auctions and Systematic Internalisers (SIs) – mechanisms that can often provide lower markup costs and genuine price improvement for clients – there are growing concerns that primary exchanges may eventually struggle to maintain robust price formation.
While some argue that a comprehensive consolidated tape could eventually become the primary reference price itself, regulators emphasise that the quality of price formation on multilateral lit venues is currently still viewed as superior to alternative mechanisms. Therefore, preserving the integrity of the lit reference price that all other trading venues rely upon remains a critical priority for the health of the broader ecosystem.
What the Buy Side Truly Needs to Succeed
For the consolidated tape to actually deliver value and improve execution, market participants have laid out several requirements:
Dispelling the Myth: The True Competitiveness of European Equities
It is important to note that the push for a tape is not because Europe is an inherently uncompetitive market. In fact, panellists strongly challenged that narrative, noting that 2025 saw record global investor inflows into European equities. Looking into early 2026, those inflows were on track to beat previous records despite ongoing global geopolitical tensions, with major European indices consistently outperforming the S&P 500. Where Europe has simply been less effective is in bringing all of its separate, highly competitive trading interests into one visible place.
Progress on the Horizon and the Call to Action
Despite the regulatory hurdles, significant progress is underway. The European Securities and Markets Authority (ESMA) has already selected two active candidates who are currently preparing to build and operate the tape. Rather than waiting to solve every single data anomaly and tagging disagreement before launch, regulators have indicated a preference for an iterative, step-by-step implementation. The goal is to get the tape live, identify the downstream issues in practice, and fix the remaining tagging inconsistencies over time.
Market participants are strongly encouraged to join the FIX buy side working groups to help define the rules of the road, standardise liquidity definitions, properly classify non-price-forming liquidity, and ensure the final tape actually meets their daily trading needs.
