Kelvin To, the Founder and President of Data Boiler Technologies, has raised concerns about the efficacy of the European Equity Consolidated Tape (CT), questioning its ability to meet modern trading needs.
In an op-ed published recently, To critiques the European Economics (EE) report on pre-trade equities consolidated tape, highlighting the exclusion of critical studies that, according to him, reveal flaws in the proposed system.
Kelvin To criticizes report on pre-trade equities consolidated tape
Kelvin To argues that the EE report disregards important findings from Giovanni Cespa and Thierry Foucault’s study, which emphasized how restricting access to price information from stock exchanges worsens data fragmentation. He asserts that the latency gap between Proprietary Products (PPs) and Securities Information Processors (SIPs) is largely a result of outdated market infrastructures. Additionally, he criticizes the report’s claims of significant improvements in SIP performance over the last 15 years, dismissing them as overly optimistic and not reflective of current technological advancements.
Drawing on his experience in the U.S. market, To points out that investment firms, including Self-Aggregators (SAs) and Alternative Trading Systems (ATSs), have successfully utilized a mix of U.S. SIP/CT alongside proprietary feeds to balance cost and performance. He believes that a similar model could be adopted in Europe to address the need for speed and efficiency in market data aggregation.
Central to To’s argument is the notion that a consolidated tape should aim to be a viable alternative to PPs, promoting competitive pressures that would benefit the market. He takes issue with the EE’s suggestion that the consolidated tape cannot replace existing direct feeds due to technical limitations. According to To, low-latency CT is entirely feasible, as demonstrated by high-frequency trading firms and other market participants.
Further, Kelvin To applauds the European Securities and Markets Authority (ESMA) for recognizing the distinct roles of Consolidated Tape Providers (CTPs) and Approved Publication Arrangements (APAs), particularly in ensuring data quality and operational resilience. He also supports ESMA’s efforts to simplify certain aspects of the trading venues’ perimeter and transparency regime, emphasizing that these reforms will benefit the broader industry.
Kelvin To also raises concerns about the European approach to bond CTPs, referencing the UK’s decision to exclude payments to data providers, which he sees as a step in the right direction. He warns, however, that excessive regulation could lead to market shrinkage, citing the impact of similar measures in Singapore and Australia.
While To acknowledges the European market’s potential, he believes the region’s lack of innovation in critical areas—such as using time-lock cryptography for greater transparency and reducing dependency on high-cost data centers—puts it at a disadvantage compared to the U.S. crypto market, which he trusts more. The challenge, he argues, is Europe’s hesitation to invest in new technologies that could differentiate it from U.S. markets and improve competitiveness.
To concludes by urging policymakers in the EU and UK to take bold actions that would foster trust, lower costs, and make European markets more attractive to global investors. He stresses that innovation, not merely regulatory compliance, will be key to the region’s future success in the global financial landscape.
