According to Financial Times News, the UK Financial Conduct Authority plans to ask a High Court judge to lift the suspension on a key bond market data contract later this month. Ediphy Analytics has sued the regulator, alleging it was wrongfully excluded from bidding due to a “technical fault” in the tender software. The lawsuit also claims conflict of interest concerns involving Stephane Malrait, who resigned from winning bidder Etrading Software just two weeks before joining the FCA board on October 20. If the suspension isn’t lifted, lawyers believe the legal battle could take two years to resolve, though an accelerated process could see resolution by next year. Both companies had offered to provide the consolidated tape service for free, with Ediphy having separately won the EU’s bond data contract in July.
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<h2 id="market-impact”>What this means for UK markets
Here’s the thing – this legal fight isn’t just bureaucratic wrangling. The UK’s entire push to make its bond markets more transparent and competitive is now on hold. A consolidated tape basically creates a single source of truth for bond pricing across the market. Without it, investors are working with fragmented data that makes it harder to assess true market value.
And the timing couldn’t be worse. The EU is already moving ahead with its own consolidated tape initiative. If this legal battle drags on for two years, the UK risks falling seriously behind in market infrastructure. That’s not great for a financial center trying to prove it can thrive post-Brexit.
The players and their positions
Look, this isn’t just two companies fighting over a contract. Ediphy is backed by some serious heavyweights through its fairCT consortium – we’re talking UBS, Norges Bank, TP ICAP, and even Google Cloud. That’s not exactly a scrappy startup lineup.
Meanwhile, Etrading Software insists they’ve followed all the rules and governance standards. Both companies were prepared to do this for free, which tells you how strategically important they see this market position. Basically, whoever wins gets to shape the infrastructure for UK bond market data for years to come.
The conflict of interest question
The Malrait situation is… interesting. He resigns from Etrading Software two weeks before joining the FCA board, but only after Ediphy raises questions. The FCA says there was no conflict because the contract decision happened before he joined. But come on – does that really pass the smell test?
Even if everything was technically above board, the appearance matters in regulation. When you’re dealing with market infrastructure this important, perception can be as damaging as reality. It’s the kind of thing that makes market participants wonder about the process.
Where this goes from here
So what happens now? The FCA’s request to lift the suspension later this month is crucial. If the judge agrees, the project can move forward while the legal fight continues in the background. If not, we’re looking at potentially years of delay.
The real question is whether the urgency of this market infrastructure project will convince the court to speed things up. Given how critical this is for UK financial competitiveness, you’d think everyone would want to move faster. But legal challenges have their own timeline, and sometimes that timeline doesn’t care about market needs.
