UK FCA finalises SI regime changes for bonds and derivatives and other consultation proposals

The UK Financial Conduct Authority (FCA) has published policy statement PS25/17 on removing the systematic internaliser regime for bonds, derivatives, structured finance products and emission allowances from 1 December.

Following feedback from its July consultation, the FCA is adopting all proposals as consulted on, except for the second proposed change to the price waiver. That change would have allowed a trading venue to derive the price from the best bid and offer prices on the lit order book where reference price orders are placed, which would allow placing mid-price dark orders below large in scale on lit order books. The FCA remains minded to implement this change after gathering further information to ensure the change does not weaken the information content of post-trade data. The FCA expects to finalise a proposal on post-trade transparency in its forthcoming consultation on equity transparency. Meanwhile, from 20 March 2026, trading venue operators will be permitted to use a broader set of prices from a wider set of venues when crossing orders for equities under the reference price waiver.

The FCA also confirms the repeal of the rule that prevents investment firms from carrying out matched principal trading on their multilateral trading facilities and from operating an organised trading facility in the same entity for which they are a systematic internaliser from 30 March 2026.

The changes in this policy statement are permissive and create no new obligations unless firms choose to take advantage of the new opportunities. Firms opting in should review the final rules and assess any operational or compliance updates required. The final rules entered into force on 1 December. The FCA has published the final legal and standards instruments (appended to this policy statement) and will update its Handbook accordingly.

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