UK FCA findings on wholesale banks delivery of best execution in UK listed cash equities

The UK Financial Conduct Authority (FCA) has published the findings from its multi-firm review of how wholesale banks deliver best execution in UK listed cash equities. The webpage highlights good practices and areas for improvement on issues including scope of best execution, governance and oversight, monitoring and management information, and managing conflicts of interest, with examples for firms to benchmark against. Although the review focuses on UK-listed cash equities, some findings are relevant to other products. The review, covering eight wholesale banks, found stronger practices compared to the FCA's 2014 thematic review, including improved monitoring of best execution and efforts to address examples of poor outcomes. The FCA also found no evidence that internalisation harmed client outcomes. However, the quality of management information (MI) to support senior management oversight was inconsistent, ranging from comprehensive to being either too high-level or overly complex.

Governance and oversight showed some good practices but remained the area of least progress since the 2014 review, particularly the need for improvement in the challenge from the second line of defence. The strongest banks had empowered their compliance functions in this area, supporting them with appropriate data and tools. Following its findings from the review, the FCA has provided individual feedback to the banks involved.

During the review, the FCA also received feedback on the scope of best execution and express consent requirements under COBS 11.2A.24R, which it will consider in any future review of its rules. Furthermore, the FCA's work in this area aligns with broader initiatives including CP25/20, which seeks views on market effectiveness in light of recent developments in market structure, and PS25/17, introducing changes to the systematic internaliser (SI) regime for bonds, derivatives, structured finance products and emissions allowances. The FCA is also undertaking broader work on the effectiveness of equity markets, including considering the structure of trading and the liquidity provided by SIs, using MiFID II transaction data and order book information, alongside exploring execution outcomes across different venues. The FCA may consult on any potential rule changes, if appropriate, in H1 2026.

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