FCA’s Landmark Bond Data Project Frozen Amid Legal Battle Over Procurement

The UK’s plan for a centralised bond market data feed has been halted by an “automatic suspension” after the regulator was sued by a losing bidder, delaying a key pillar of the UK’s post-Brexit market reforms.

The UK Financial Conduct Authority’s (FCA) flagship project to enhance bond market transparency has been brought to a sudden halt. A legal challenge filed by unsuccessful bidder Ediphy Analytics has triggered an automatic suspension of the contract, preventing the regulator from finalising its appointment of Etrading Software (ETS) as the UK’s first bond consolidated tape provider (CTP).

The move freezes a critical piece of UK financial infrastructure designed to give the market a unified view of bond pricing. The delay now raises significant concerns about the UK’s competitiveness as it races against the EU to modernise its market data infrastructure.

Why the Consolidated Tape Matters

For fintech professionals and traders, the UK’s fixed-income market is notoriously opaque. Unlike stocks, bonds often trade “over-the-counter” (OTC), meaning data is fragmented across numerous private venues and platforms.

A Consolidated Tape (CT) solves this by collating post-trade data—such as price and volume—from all trading venues and approved publication arrangements (APAs) into a single, comprehensive data feed.

This project is a cornerstone of the UK’s post-Brexit Edinburgh Reforms and the Wholesale Markets Review. The primary goals are to:

• Improve Transparency: Give all market participants, from large banks to smaller fintech firms, a clear view of market-wide pricing.
• Boost Liquidity: Allow investors to find counterparties and execute trades more efficiently.
• Enhance Price Discovery: Ensure firms are getting the best execution by comparing prices from a single source.

The FCA ran a competitive tender process to appoint a single entity to build and operate this CTP for a five-year term. In late August 2025, the regulator selected Etrading Software for the £4.8 million (including VAT) contract.

The Heart of the Dispute: A Flawed Process?

The legal challenge comes from Ediphy Analytics, one of the three other bidders assessed in the final stage. In an ironic twist, Ediphy’s consortium (fairCT) was the firm selected to run the EU’s rival consolidated tape for bonds earlier in the year.

Ediphy’s lawsuit alleges significant failures in the FCA’s tender process, effectively accusing the regulator of breaking procurement law. According to reports, the challenge claims:

• Technical Faults: The FCA allegedly used a faulty online auction system that failed to register a bid submitted by Ediphy.
• Conflict of Interest: The lawsuit also alleges the FCA overlooked a potential conflict of interest during the selection.
• Price vs. Quality: This legal challenge follows earlier industry warnings that the FCA’s procurement process was overly focused on the lowest price, creating a “race to the bottom” at the expense of data quality and service robustness.

The FCA has publicly defended its process, stating, “We undertook a fair, competitive 2-stage process to ensure the provider could deliver a high-quality tape and the best value for money.”

Market Impact and a Race Against Time

This legal battle is more than just a procurement squabble; it has tangible consequences for the UK market.

The “automatic suspension” means all work on the CT is now frozen until the High Court either lifts the suspension or the case is resolved. Etrading Software (ETS), the winning bidder, has warned that the delay is damaging UK market integrity.

“We respect the right of bidders to pursue legal avenues,” ETS said in a statement, “but we also recognise that every day of delay hampers the UK’s ability to improve price discovery and increase liquidity in UK bond markets.”

The primary risk is that the UK will fall behind its global competitors. The US has operated its TRACE system for years, and the EU’s own CT (run by Ediphy) is now moving forward. This delay stalls the development of new fintech applications, analytics platforms, and trading tools that were dependent on the launch of the UK tape.

The FCA intends to fight the challenge and proceed with the contract “as soon as possible.” The regulator can apply to the court to have the suspension lifted, which would allow the project to continue while Ediphy’s claim is resolved, most likely through financial damages if successful.

For now, the UK’s fintech and financial sectors are left waiting as a legal fight over process threatens to derail one of the most significant upgrades to UK market infrastructure in years.

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