According to Financial Times News, the UK Financial Conduct Authority plans to ask a High Court judge to lift a suspension on a key bond market data contract awarded to Etrading Software. The legal challenge comes from rival Ediphy Analytics, which claims a “technical fault” wrongfully excluded it from bidding and alleges conflict of interest involving Stephane Malrait, who joined the FCA board on October 20 after working for Etrading Software. Under UK procurement rules, contracts are automatically suspended when challenged in court, potentially delaying the UK’s consolidated tape initiative by up to two years if the suspension isn’t lifted. Both companies had offered to provide the service for free, and Ediphy recently won the equivalent EU contract in July through a separate tender process.
<h2 id="market-impact”>What this means for UK markets
Here’s the thing – this legal battle isn’t just bureaucratic squabbling. The consolidated tape is supposed to aggregate bond pricing data across UK markets, creating something that doesn’t currently exist. Without it, investors are basically flying blind compared to their EU counterparts who will soon have their own unified data stream. And that puts UK fixed income markets at a serious competitive disadvantage. We’re talking about transparency, efficiency, and ultimately attracting investment. If this drags on for two years, Britain could find itself playing catch-up in a market that’s already fragmented post-Brexit.
The conflict of interest concerns
Now, the Malrait situation is particularly messy. He was working for Etrading Software while apparently lined up to join the FCA board. Ediphy claims they only questioned the FCA about this perceived conflict, and then Malrait resigned from Etrading about two weeks before joining the regulator. The timing looks… convenient, doesn’t it? The FCA insists there was no actual conflict since Malrait wasn’t involved in the contract decision-making. But perception matters in regulation. When you’ve got a major market infrastructure contract at stake, even the appearance of impropriety can undermine confidence in the entire process.
Why this matters beyond this case
Look, this isn’t just about two companies fighting over a contract. The consolidated tape concept has been debated for years as a way to make bond markets more transparent and efficient. What’s fascinating is that both bidders were willing to provide this service for free – which tells you how valuable the data rights and market position could be long-term. And with Ediphy winning the EU contract while Etrading got the UK nod, we’re potentially looking at a fragmented European data landscape anyway. So even if this gets resolved quickly, the bigger question remains: will investors get the comprehensive cross-border data they actually need?
