The Financial Conduct Authority (FCA) has unveiled measures to reinforce the UK’s position as a global financial centre and enhance market transparency.
The FCA plans to establish a consolidated tape (CT), merging multiple trading data sources into a single stream, increasing transparency, lowering costs and improving data quality.
Initially, the CT will focus on bonds, where the UK holds a leading market position, before expanding to equities. A competitive tender process will determine a single CT provider for bonds.
The FCA aims to have the regulatory framework in place by 2024, strengthening the UK’s bond listing and trading position.
The FCA will also consult on reforms for bond and derivative transparency requirements later this year to simplify the regime and enhance trade data content and delivery.
In addition, the FCA has released guidance on the trading venue perimeter, clarifying authorisation requirements as a trading venue. Furthermore, the FCA is launching a pre-application support service (PASS) to aid overseas wholesale firms and their advisors in expanding into the UK, focusing on innovative, complex or high-risk business models.
The PASS includes pre-application meetings and FCA speaker participation in industry events. These measures aim to bolster the UK’s financial services sector and foster investment certainty.
Sarah Pritchard, executive director of markets and executive director of international at the FCA, said the FCA is adapting its rules to provide certainty for firms, and so providing a “good environment” for investment.
“The new consolidated tape will help reduce trading costs, increase transparency and improve data quality,” she said.
Jim Goldie, head of EMEA ETF capital markets at Invesco, welcomed the move and said, “The added transparency a consolidated tape will bring to the UK can only contribute to more robust capital markets via improved transaction cost analysis.
“This will help to document best execution, enhance market surveillance and improve liquidity risk management and portfolio valuation, all of which adds to investor protection.”
© 2023 funds europe
