UK Financial Conduct Authority publishes Dear CEO letter for trading venues

The U.K. Financial Conduct Authority has published a Dear CEO letter setting out its key concerns and priorities over the next two years for trading venues (that is, recognized investment exchanges, multilateral trading facilities and organized trading facilities).

The FCA's supervisory priorities include:

• operational resilience — in the coming period, the FCA will focus on the preparedness of RIEs for the new regulatory framework surrounding operational resilience confirmed by PS21/3. The FCA will also be selecting certain MTFs and OTFs for a further review of their operational resilience;
• market orderliness — the FCA will continue to discuss with trading venues how they are developing the systems and controls they have, to maintain an orderly market in response to the evolving technology and risk landscape, with a focus on volatility management;
• competition, innovation, and growth — the FCA will offer trading venues, among others, the opportunity to trial new services for the trading and settlement of digital securities, and the intermittent trading of private company shares, via the Digital Securities and PISCES sandboxes; and
• voluntary carbon markets — while underlying voluntary carbon credits do not fall within the FCA's regulatory perimeter, venue operators must ensure that an orderly market is maintained for voluntary carbon market related financial products and instruments for which they provide a market.

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