UK FCA consults on income sharing distribution and operational incident reporting for CTPs

The UK Financial Conduct Authority (FCA) has published a consultation paper (CP26/39) on proposals for sharing income among data contributors to a UK equity consolidated tape (CT), as well as enhanced operational incident reporting requirements for all CT providers (CTPs).

In its July policy statement (which was combined with a consultation on draft rules about the inclusion of systematic internaliser quotes in the equity CT, and a call for input seeking views on key contractual requirements for the equity CTP) (CP26/31), the FCA required the equity CTP to share a portion of its income with data contributors.

The FCA confirms that implementation of the income sharing arrangements will involve two key stages. First, the FCA will determine the share of income to be paid to data contributors through its five-year concession agreement with the CTP, with its requirements expected to be confirmed in early 2027 following the call for input in Chapter 11 of CP26/31. Second, the FCA will establish Handbook rules and guidance on how that share will be allocated among data contributors, which is the focus of this consultation. Under the proposed income distribution model, the FCA proposes that:

• all UK trading venues and approved publication arrangements would be eligible to receive income based on the relative value of the trades they submit to the equity CT
• half of the shared income would be reserved for central limit order book or periodic auction trading systems, which will provide pre-trade data to the CT, to incentivise the submission of high-quality pre-trade data
• trades executed on smaller trading venues would carry a greater weighting, as the costs of providing data may be more acutely felt by these venues.

While bond and equity CTPs are already subject to operational incident reporting requirements under SYSC 15A and MAR 9, the FCA also proposes to extend the requirements in SUP 15.18 to all CTPs, ensuring that significant operational incidents are reported to the FCA in a timely and consistent manner. This would align CTPs with the standards applicable to other providers of key market infrastructure, including UK recognised investment exchanges. These proposals build on PS26/2, which sets out the rules in relation to the regulators' final policy on operational incident and third-party reporting which come into force on 18 March 2027.

The deadline for comments is 17 December with the policy statement expected in spring 2027.

For readers tracking the consultation on draft rules about the inclusion of systematic internaliser quotes in the equity CT and the call for input on key contractual requirements for the equity CTP, the FCA intends to publish the respective policy statement and feedback statement in early 2027.

The FCA intends for the CTP to start operating in 2027 or early 2028.

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