Bidding for nothing – what do you get for 68p?

November 7, 2025

164

Court documents filed by Ediphy Analytics explain that it planned to offer consolidated bond tapes for free – before it was knocked out of the Financial Conduct Authority’s auction. Questions about the sustainability of a zero-cost tape, and the dangers of a “race to zero” auction process.

The auction for the UK bond consolidated tape began at a weighted average price cap (WAPC) of £1,209. Etrading Software won the auction at a WAPC of 68p.

While a low-cost tape would appeal to the market in the short term, those close to the issue have expressed concerns that it could create an unstable and unsustainable service.

For its part, Ediphy intended to bid to zero, it has confirmed in a court filing – and expected the auction to continue to this point. This would mean that it could not charge for access to the tape. It won the bid for the EU tape in July.

“It is self-evident that continuing the reverse auction would have resulted in a lower price that users would have to pay for the relevant services,” Ediphy’s filings state.

“In failing to have regard to the importance of delivering value for money, the Defendant committed the users of UK Bond Consolidated Tape to at least five years of paying more for the service. The Claimant’s model was to operate the consolidated tape as a public utility, recovering its costs through downstream services rather than tape subscription fees,” Ediphy’s court documents alleged.

A number of bidders for the tape do or will offer supplementary services to the tape. ETS’s Connect Premium service is expected to provide data from the upcoming UK and EU bond transparency regimes, akin to a consolidated tape. Propellant Digital provides “near real-time transaction data “ on sovereign bonds, along with corporate bond post-trade data.

Such services could allow companies to offer the consolidated tape at a lower price, with profits made elsewhere.

In DotEcon’s June 2023 report for the FCA, ‘Procuring a consolidated tape provider’, the role of value-added services was addressed. The firm stated, “core services would need to be offered on a standalone basis and could not be tied to supply of value-added services.”

Further, court filings say that Ediphy contacted the FCA on 14 August “expressing significant concerns about the process being flawed with the result that Contract would be awarded at a WAPC which would be unsustainable for bidders who, unlike the Claimant, did not have the ability to deploy infrastructure developed for a comparable contract elsewhere,” the documents say.

With the FCA’s auction-based exclusively on price, industry bodies warned that the process would prompt a ‘race to the bottom’ – a sentiment echoed by Etrading Software in May 2024, despite its acceptance of the incredibly low WAPC in the final round.

In its invitation to tender document, the FCA stated that if a bid appeared to be abnormally low, with the danger of putting the sustainability and satisfactory delivery of the tape over the five-year contract at risk, then the bidder may be required to explain and justify its pricing proposals.

No record of these justifications being demanded is seen in Ediphy’s court documents or Etrading Software’s comments on the matter, despite the 68p figure being far below the expected revenue of the contract.

In a consultation paper explaining the cost-benefit analysis of the tape, the FCA said, “The CTP will be able to charge users for accessing the data. We are unable, on the information currently available, to assess total value and as such have used cost to assess this. The anticipated total value of the CT Contract to the CTP is in the region of £29.5 million.”

Using the FCA’s WAPC framework, 68p does not appear to translate to this figure.

In October, the regulator stated that it expects the revenue that the provider will be able to make from the tape will be £4 million, over the entire five year contract. Again, using the FCA’s WAPC framework, 68p does not appear to translate to this figure.

TOP OF PAGE