UK FCA consults on equity market transparency and considers market structure developments

The UK Financial Conduct Authority (FCA) has published consultation paper CP26/30 on equity market transparency and market structure developments, building upon the discussion chapter in CP25/20 on whether reforms would be warranted. Alongside the consultation, the FCA published final rules on the framework for a UK equity consolidated tape and the next steps for its delivery.

In this consultation, the FCA proposes targeted reforms to strengthen post-trade transparency and refine the systematic internaliser (SI) regime, against a backdrop of increasing fragmentation in UK equity trading and the planned introduction of a UK equity consolidated tape. Key proposals include:

• Extending the current exclusion from post-trade transparency for non-price forming over the counter transactions to equivalent transactions reported to trading venues, and clarifying and strengthening the rules on back-reporting.
• Reformulating the reference price waiver to enable trading venues to integrate midpoint dark orders within transparent limit order books.
• Requiring equity SIs to publish quotes showing the price and volume at which they are prepared to buy and sell up to and including standard market size.

While the FCA considers UK equity markets to remain liquid, resilient and effective, it notes the continuing shift away from central limit order books towards alternative execution mechanisms. It therefore proposes a monitoring framework on future market structure developments using both quantitative and qualitative indicators. Chapter 3 sets out potential intervention measures should monitoring indicate challenges to market integrity, and the FCA invites feedback on the avenues that could be pursued. The FCA also proposes guidance on trading venue outage protocols to support market resilience and includes a separate chapter on retail equity trading.

The proposals entail changes to the FCA Glossary, Market Conduct (MAR) and Recognised Investment Exchanges sourcebooks, including transferring provisions from the UK Markets in Financial Instruments Regulation (600/2014), UK MiFID RTS 1 and UK MiFID RTS 7 into MAR, and revoking UK MiFID RTS 8 in its entirety. The deadline for responses is 16 October with a final policy statement expected in H1 2027.

Return to main website.