The consultation, which ends on 14 September, aims to lower the cost of reporting for firms, improve post-trade transparency and remove some restrictions that are limiting the ability of UK trading venues to compete with other markets.
Other changes mooted include establishing a new ‘designated reporter’ status for OTC trades and allow UK trading venues to use reference prices from overseas markets where those prices are “robust, reliable and transparent.”
The FCA also suggested removing or amending some provisions that impose material operational and compliance costs on firms but have not delivered material benefits to end users or to market functioning,” said the FCA.
Overall, the FCA believes that the proposals will enhance the resilience of trading on UK trading venues and bolster cross-border competition in trading.
For instance, the paper said, “By allowing U.K. trading venues to source reference prices from overseas markets, market participants should have more choice and see greater competition on where they can execute their trades.”
In turn, enhanced competition should also lead to lower trading costs, it added.
The FCA is also seeking feedback on the structure of UK markets for retail orders, and on its approach to improving the market’s resilience to outages.
The consultation paper is part of the Wholesale Markets Review (WMR), the review of UK wholesale financial markets that the regulator has been conducting with the Treasury.
“We are consulting now because the proposed reforms concern parts of the regime that are already set out in regulatory rules and guidance and are therefore not contingent on changes that are intended to be implemented via the Financial Services and Markets Bill,” said the FCA.
“This is to ensure that burdensome and unnecessary requirements are removed as soon as possible.”
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