If 2025 is the inflection point, then 2026 is a new interval of concavity. The global financial landscape is characterized by a significant divergence in regulatory philosophy. The question is – whether a new equilibrium will be achieved in 2026 through a smooth convergence or only after a systemic breakdown.
Market data reforms have largely moved past the stage of rulemaking and are being prepared for implementation. There is no extension for the Odd-Lots and Round-Lot provisions under the US Market Data Infrastructure Rules. The temporary exemptive relief on Tick Size (minimum pricing increment) and the amendment to access fee cap will become due on Nov 1, 2026. Exchange fees are required to be determinable at the time of execution starting in February 2026. We have warned about a potential price increase for subscribers of Securities Information Processors.
In Europe, the UK and EU picked different vendors to build their respective bond tapes. It remains to be seen how they would compare to the value-added services of MarketAxess, Tradeweb, and Bloomberg. For equity, EuroCTP – a joint venture of 15 European exchange groups is targeting to launch the EU equity tape in July 2026, whereas the UK FCA is soliciting comments about different options, e.g.:
- a post-trade only tape for UK equities from all trading venues and APAs, distributed with a latency of 300 milliseconds or less from publication;
- a tape with post-trade data and the attributed best pre-trade bid offer (i.e. top of book) from lit UK venues, distributed with a latency of 100-200 milliseconds;
- a tape with post-trade data and the attributed top 3 pre-trade bids and offers from lit UK venues, distributed with a latency of 40-100 milliseconds;
- a tape with post-trade data and the attributed top 5 pre-trade bids and offers from lit venues and SIs, distributed with a latency of 20-40 milliseconds.
The ESMA equities consolidated tape RTS contains fatal flaws. The CT Plan operating committee in the US selected an "Administrator" but refused or unable to address the line-drawing issues about “derived data.” Sources of the problem are being invited to administer/ enforce an inequitable scheme. Have policy makers forgotten these acknowledged concerns: "onerous administrative obligations on data users; ambiguous language in the agreement; frequent unilateral amendments to the agreement; general lack of transparency on terms and conditions; excessive fees; increase of fees through penalties; and overly burdensome audits"?
NASDAQ's equalization project in removing its dedicated GPS antenna may ease conflicts among subscribers of collocation service. Yet, NYSE's rooftop antenna service remains a controversy. Meanwhile, the China Securities Regulatory Commission issued a directive banning high-frequency trading firms from using client-dedicated servers co-located within exchange data centers, as well as new guidelines for the application of cryptography technology in information systems of securities and futures industry. Not until a mandate of market data available securely in synchronized time and the questions of who owns the data being addressed, inequitable situations would remain.
The US SEC may inadvertently destroy the National Market System’s most prominent feature – a constant refreshing and tight National Best Bid and Offer that Order Protection Rule has intricated relationships with the availability of market data. The honorable goals of improve transparency and better identification of addressable liquidity are unfortunately no-match to segmentations and money flows toward DeFi, such as Cantor Network, Solana Network, etc. TradFi establishments infuse trust into crypto ecosystem while a toll gate to rent seek from flows passing through their infrastructures is inevitable.
NOTE: smart contracts are an oversimplified mechanism for delineating complex real-world rights and obligations. Challenges include: limited access to off-chain data; interoperability issues, where different chains operate in silos; immutability (which provides security but leads to inflexibility or difficulty capturing legal nuances when dealing with evolving circumstances, renegotiations, or unforeseen events). In turn, hybrid solutions are being created, resulting in DeFi convergence to TradFi with no necessary efficiency gain.
We do support a dual-track regulatory regime where the US Senate crypto market structure bill talks continue after delay. A caveat – crypto ETPs where the underlying assets do not necessarily have to be “securities.” We have reservations with the SEC’s generic listing standards that the asset has to be listed on one of the Intermarket Surveillance Group’s markets. This reminds me of AIG – notorious for engaging in credit enhancement and securitization that led to their financial distress during the 2008 financial crisis.
Facing a digital shift, banks diverge: some fear stablecoin rewards could lure away deposits, others develop tokenized deposits. We recommend granting a “break-bulk exemption” that will allow smaller banks and credit unions to use incidental banking service to compete with DeFi. Meanwhile, large US banks push for Basel III endgame repeal, wanting assurance increased digital asset holdings would not trigger extra risk capital.
We have reservations about the privacy and security of the US Consolidated Audit Trail system and the BIS / IIF prescribed unified ledger / Project Agorá. The approach to “suck” new money from Digital Asset activities may be unconventional, but becoming the biggest force behind DeFi is better. We recommend to dollarize everything to turn the table against de-dollarization threats. The phenomena of currency and tariff wars today are the result of breached contracts. The ideal way to weed out Illicit activity involving Digital Assets is by reducing bureaucracy and removing barriers that widened the gap between the “haves” and “have nots.”
The path to a new equilibrium would be contentious. Many of the unfit would be displaced in a game of Hegemony and AI. Surely, some will selectively broadcast an image of sour, rotten decay. Yet, a systemic breakdown seems unlikely to happen in 2026. Market microstructure focuses heavily on speeds and rates of change. Global orders and macro trends are largely about the aggregation of volumes and mass customization. Serendipity is the ability to capitalize on the unexpected.
By Kelvin To, Founder and President of Data Boiler Technologies
Data Boiler is a Type C organization member of the European Commission’s Data Expert Group. Between my patented inventions in signal processing, analytics, machine learning, etc. and the wealth of experience of my partner, Peter Martyn, we are about Market Reform, Governance, Risk, Compliance, and FinTech Innovations to create viable paths toward sustainable economic growth.
