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The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, is encouraging all market participants to prepare for the start of the activities of the Consolidated Tape Provider (CTP) for bonds.
To facilitate this preparation and in response to questions from stakeholders, ESMA provides clarification on:
- the timing of the entry into force and application of the delegated acts related to CTP and the transparency regime; and
- the possibility of ESMA granting a transition period to the selected and authorised CTP for bonds.
Status of adoption of RTS
ESMA has no indication that the European Commission (EC) intends to introduce substantial changes to the draft technical standards (RTS) that ESMA published on 16 December 2024 and expects them to be adopted shortly.
These draft RTS contain requirements for data contributors’ connection and contribution to the CTP, including those pertaining to input and output data of the CTP, the synchronisation of business clocks, and standards on bond transparency, and ESMA encourages all market participants to use these draft RTS to proceed with all preparatory steps necessary to be ready for the start of the activities of the CTP.
Status of possible transition period
The process for the CTP selection for bonds was launched in January 2025 and continues as planned. ESMA intends to adopt a reasoned decision on the selected applicant by early July 2025. Once the selection procedure ends, ESMA recommends that all data contributors engage with the entity selected as the CTP for bonds for any necessary preparatory steps, including - but not limited to - connectivity, licensing and other practical and technical arrangements needed.
The successful applicant will be selected to operate the CTP for a period of five years and will be invited to apply for authorisation without delay.
The exact duration of the authorisation procedure will depend on the completeness of the applicant’s submissions and their ability to reply to ESMA’s requests. To expedite the process, ESMA ensured that the selection and award criteria for the selection procedure covers the main conditions for the authorisation of the selected CTP.
ESMA acknowledges the possibility - foreseen within the Markets in Financial Instruments Regulation (MIFIR) - to grant a transitional period to the selected CTP, if it is requested by the applicant. In that case, ESMA can grant a short transition period to the authorised CTP, to ensure its readiness and the readiness of its contributors for the start of the CTP activities.
ESMA encourages market participants to prepare for the start of the CTP without counting on an extended transition period after the authorisation of the entity.
Background
The draft technical standards prepared by ESMA have been submitted to the EC for endorsement.
The EC adopts them through a Delegated or Implementing act, allowing the European Parliament and Council to object. After this process the technical standards are published in the Official Journal of the EU, which makes them legally binding across all Member States.
The first selection procedure for the CTP for bonds was launched on 3 January 2025. Once selected, the CTP must apply for authorisation.
When ESMA has deemed the application to be complete, ESMA will perform the assessment of compliance within three months of receipt of a complete application for authorisation and will adopt a reasoned decision granting or refusing authorisation. The decision granting authorisation will specify the conditions under which the applicant is to operate.
Once authorised, the CTP will be supervised by ESMA. Further information about the process is available on the dedicated webpage.
