FCA proposes to establish new designated reporter status for OTC trades
Today, the UK Financial Conduct Authority (FCA) published a Consultation Paper (CP) on proposals aimed at improving the functioning of equity secondary markets.
The changes are part of the Wholesale Markets Review (WMR), which the FCA has been conducting with the Treasury to improve the UK’s regulation of secondary markets. The Treasury’s consultation response to the WMR said that the FCA would reform the parts of the regime that are set out in regulatory rules and guidance to ensure that the most burdensome and unnecessary regulatory requirements are removed as soon as possible.
In this CP, the FCA proposes reforms 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.
In particular, the changes the FCA is consulting on would:
- Improve the content and consistency of post-trade transparency reports.
- Establish a new designated reporter status for OTC trades.
- Allow UK trading venues to use reference prices from overseas markets where those prices are robust, reliable, and transparent.
- Permit the use of the tick size regime from overseas primary markets.
The FCA is also seeking views on the structure of UK markets for retail orders and on its approach to improving UK markets’ resilience to outages.
Comments are accepted by 16 September 2022.