FCA License Holders: Your 12-Month Countdown to New Market Rules Begins

2024-11-07 09:48:40 Primitive Reading

From financemagnates

The UK's Financial Conduct Authority (FCA) announced sweeping changes to bond and derivatives market transparency rules today (Tuesday), marking the biggest overhaul of trading regulations since Brexit as the country seeks to cement London's position as a global financial hub.

The UK Tackles Trading Transparency in Post-Brexit Reform

The new framework, set to take effect in December 2025, aims to provide investors with enhanced market data while reducing compliance costs for trading venues and investment firms. The changes represent a significant shift from the complex reporting system inherited from European Union regulations.

"We want UK markets to be efficient and to support economic growth," said Jon Relleen, director of supervision, policy and competition at the FCA. "Putting more information in the hands of investors and giving investment firms greater access to research to inform their strategies will bolster UK markets."

The reforms introduce a simplified post-trade transparency regime with fewer deferrals for bonds and over-the-counter derivatives, while maintaining protections for liquidity providers. In a notable change, the regulator will discontinue its Financial Instruments Transparency System (FITRS), replacing rigid calculations with more flexible criteria for determining market liquidity.

Who this is for:

Trading venues that facilitate the trading of bonds and derivatives
Investment firms engaged in bond and derivative trading
UK branches of overseas firms providing investment services and conducting related activities
Systematic internalizers dealing in any financial instrument

The new rules will only apply to bonds admitted to trading on venues and certain derivatives subject to clearing obligations, significantly streamlining the scope of the regime.

Global investment research budgets are beginning to rebound for the first time since the introduction of MiFID II, according to a report from data analytics firm Substantive Research. The firm observed that research budgets worldwide saw an increase in the first half of 2024.

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