The UK government has rolled out a package of post Brexit reforms that expands the Financial Conduct Authority’s remit in the way it regulates the City of London.
The changes embedded in the Wholesale Markets Review gives the UK watchdog responsibility for overseeing transparent fixed income and derivatives trading, as well as pre-trade transparency, according to a government statement on Tuesday.
The regulator will also help the industry create a consolidated tape, a long-held ambition from the European Union which is also working on a cross-continental financial system that could compete with London.
In addition, there are plans to remove double volume caps on how much share-trading can occur on dark pools and repeal the so-called share trading obligation that determines where equities must be bought and sold.
Also on the agenda are proposals to allow systematic internalisers to execute at midpoint as well as simplifying regulation around the listing of companies.
However, as previously signalled – the UK has no plans for a wholesale overhaul of existing rules, as some had hoped after Brexit.
“In essence, these are common-sense, yet significant changes,” John Glen, the economic secretary to the Treasury, said in a speech Tuesday at the Association of Financial Markets in Europe. “This was never going to be and is not about change for change’s sake. I should stress that we are still very much signed up to the overall objectives of the MiFID regime.”
AFME welcomed the changes particularly “These measures will help to boost the attractiveness of capital markets in the UK, making them more agile and promoting better outcomes for investors, according to AFME chief executive, Adam Farkas,
He said AFME also agrees with the comments made by Secretary Glen to clarify that removing the STO and the DVC does not mean that trading will not be properly reported or scrutinised but will in fact bring about greater transparency by ensuring the right information is made public.
He noted that the EU is undertaking its own MiFIR Review in parallel. “As this progresses, AFME urges EU authorities to ensure they put in place the right conditions for building-out the bloc’s wholesale markets capacity to ensure EU markets remain attractive and competitive globally, “he added.
©Markets Media Europe 2022
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