UK FCA Equity Secondary Market Policy

On May 3, UK FCA issued final policy for equity secondary markets.

  • FCA issued policy statement with feedback received to proposals to improve equity secondary markets, sets out final policy position, changes to technical standards.
  • Follows UK FCA Jul. 2022 set out proposals to improve equity market, see #142774.
  • Policy Statement
  • Summarizes feedback received to consultation, received 40 responses, generally very supportive of proposals, comments on setup of the designated reporter regime (DRR).
  • Received useful input into the technical feasibility of proposals regarding post-trade transparency, in particular on the proposed amendment of the trade reporting flags.
  • FCA has tailored rules in line with firms' feedback, in certain areas, to reality and specific position of UK wholesale markets, and thinks final rules benefit participants.
  • Includes changing definition of inter-fund transfer, clarifying wording of exemption from post-trade transparency, changing definition of give-up/give-in transactions.
  • And amending post-trade transparency exemption for inter-affiliate transactions.
  • Made some some changes to proposals on improving information content of trade reports, regarding deletion and addition of post-trade identifiers (known as flags).
  • Due to concerns re proposed timelines has extended implementation period for post-trade transparency and DRR requirements to 12 months, up from 6 as proposed.
  • Also sets out future direction of work on improving resiliency of UK trading venues to outages, and on execution of retail orders under the Retail Service Provider model.
  • Changes
  • The Technical Standards (Markets in Financial Instruments Transparency) Instrument 2023 (FCA 2023/19) has made changes to Commission Delegated Reg 2017/587; Commission Delegated Reg 2017/583; Commission Delegated Reg 2017/588.
  • Related Consultation
  • FCA has also issued a separate consultation containing proposed reforms to make UK listing regime more effective, easier to understand and competitive, see #171490.
  • Effectiveness
  • The new post-trade transparency requirements will enter into force on Apr. 29, 2024.
  • All other changes come into force with effect from Apr. 28, 2023.
  • In Jul. 2023, UK FCA updated on supervision of transaction reporting, see #180616.
  • Oct. 2023 Designated Reporter Registration
  • On Oct. 9, 2023, UK FCA updated webpage entitled UK MiFID framework notifications.
  • Added information on how firms can register as a designated reporter following the introduction of designated reporter regime (DRR) coming into force on Apr. 29, 2024.
  • Firms wishing to act as a designated reporter must request that their details be added to a register by sending an email to FCA containing information on name of firm.
  • Name of individual authorized to make the request (if different from sender of email), requester's FCA-issued reference number, firm's 20-character legal entity identifier.
  • An indication if sender is registering an authorized 3rd country firm re its UK branch.
  • Registration, or deregistration which is carried out in the same way, is effective only once the firm's details appear in, or are removed from, designated reporters register.
  • The register is published ahead of DRR going live to facilitate testing of IT systems.
  • Entry on the register has no effect on reporting obligations prior to Apr. 29, 2024.

Regulators UK FCA
Entity Types Bank; Depo; Exch; IA; Inv Co; OTC
Reference Gd 10/9/2023; PS PS23/4, PR, 5/3/2023; MIFID/MIFIR Dir 2014/65, Reg 600/2014; Citation: FCA 2023/19; Reg 2017/587; Reg 2017/583; Reg 2017/588;
Functions Compliance; Financial; Legal; Operations; Registration/Licensing; Reporting; Risk; Trade Reporting; Trading; Treasury
Countries United Kingdom
Products Banking; Equity; Fund Mgt; Securities
Regions EMEA
Rule Type Final
Rule Date 5/3/2023
Effective Date 4/29/2024
Rule Id 171476
Linked to Rule :142774
Reg. Last Update 10/9/2023
Report Section UK

Last substantive update on 10/12/2023