LONDON, May 7 (Reuters) - Banks and asset managers are

vying with Europe's exchanges to develop technology that can

deepen the pool of investors in the continent's capital markets

and better compete with Wall Street.

The United States has long had a 'consolidated tape'

aggregating stock and bond prices from competing trading

platforms for investors to spot the best deals, and the European

Union and Britain seek to match this over the coming three

years.

"The purpose of the tape is to democratise access to market

data and to make sure that everybody is seeing the full breadth

and depth of the market," said Natan Tiefenbrun, president of

North American and European equities at Cboe Global Markets ( CBOE ), a

pan-European stock exchange.

The current "messy" and fragmented system for market data

discourages investors, Tiefenbrun added.

EU securities watchdog ESMA said it will consult before the

end of May on its criteria for selecting winning bidders to run

a tape for bonds initially, and then one for stocks.

The two contenders that have emerged so far to run an EU

stocks tape highlight the tensions between exchanges and banks

and asset managers over the price of market data.

Exchanges had opposed a tape in order to guard their

lucrative data, while asset managers and banks say there would

be no data without their trades. To bring exchanges on board,

the EU has mandated exchange contributions to a tape.

EuroCTP, backed by 14 exchanges including Deutsche Boerse

and Euronext, is moving early by investing

millions of euros to start building a stocks tape now, before

any regulatory nod.

A little further behind, French consultancy Adamantia

launched a feasibility study for a stocks tape in 2021, with

support from Barclays ( JJCTF ), BNP Paribas, Credit

Agricole, Deutsche Bank, Societe Generale

and UniCredit.

Adamantia said it was securing an investment plan and

selecting a technology company for a tape, backed by 10 buy- and

sell-side institutions.

"Once we finalise this step, the objective is to form a

joint-candidature ... and prepare for the upcoming ESMA tender,"

said Adamantia partner Antoine Pertriaux.

ESMA is expected to invite bidders for a bond tape by early

next year, and for a stocks tape after that.

An Oliver Wyman report for European exchanges industry body

FESE estimated it would cost up to 98 million euros ($105.09

million) to build a stocks tape, but proponents say a single

real-time snapshot of prices would make cross-border trading in

Europe easier and lure more investors. Only large market

participants with deep pockets can typically afford to get

prices from the many trading platforms dotted across the EU.

In the United States, the consolidated tape electronic

system has been in place for decades, overseen by the

Consolidated Tape Association, a grouping of exchange

participants including the New York Stock Exchange and the

Nasdaq.

OPERATIONAL PHASE

Britain is also making plans for its own tapes, overseen by

the Financial Conduct Authority (FCA).

"By building a more complete picture of the market, a tape

will reinforce the UK's position as a leading centre for the

listing and trading of bonds," said Sarah Pritchard, FCA

executive director for markets.

European funds industry body EFAMA says a tape should serve

market participants and in "no way be used to render European

exchanges' own proprietary feeds more attractive".

EuroCTP CEO Eglantine Desautel told Reuters there is a need

to begin building the EU tape given it has to knit together 300

trading and trade reporting platforms across Europe.

"We are moving to the operational phase right now, and in

the beginning of 2025 will have the first elements for testing,"

Desautel said.

Tiefenbrun said Cboe was potentially interested in being

part of a stocks tape in the EU and one in Britain, adding there

is "nervousness" over EuroCTP.

"Will the shareholders of EuroCTP deliver what the industry

wants or will their long-term interests be better served by a

tape that protects their existing market data revenues?"

EuroCTP said it will act with "full autonomy" to serve all

market participants.

Britain's FCA is due to set out further details on what a UK

tape would look like, starting with bonds.

The London Stock Exchange Group ( LDNXF ) said a UK

stocks tape should be limited to prices of completed

transactions, narrower than the EU tape, which will also include

indicative "pre-trade" prices. A tape "cannot be both

operationally robust and low-cost", LSEG said in a paper

published last month.

On the bonds side, a major EU and UK contender, a troika of

Bloomberg, MarketAxess ( MKTX ) and Tradeweb, threw in the towel earlier

this year, citing complexity.

This left Etrading Software alone for now, with CEO Sassan

Danesh saying the company plans to bid for both the EU and UK

bond tapes, citing its neutrality.

"We are a technology company, and we are happy to make money

from the technology and operations, we are not looking to make

money from the data," Danesh said.

($1 = 0.9326 euros)