On May 9, 2025, Reg-Track made changes to the rule type and effective date.
Also for clarify moved content regarding the SI regime in the UK to #253653.
In Feb. 2025, UK FCA issued policy statement PS25/1 Reforming the commodity derivatives regulatory framework, summarizing feedback to proposals, see #193506.
In Jul. 2025, UK FCA consulted on SI regime for bonds and derivatives, see #261519.
FCA issued CP23/32 entitled improving transparency for bond and derivatives markets.
The consultation sets out proposals to revise the transparency framework for the bond and derivative markets in UK, and to define scope and calibration of new framework.
On same day, UK FCA issued plans on new listing rules and listing rulebook, #195242.
FCA also consulted on a consolidated tape regime for the bond markets, see #195288.
Consultation Proposals
Clarify which asset classes are in scope, and exemptions from post-trade transparency.
Improve the content of post-trade information: fields and flags;
Proposed rules are to improve transparency regime for bond and derivative markets.
New guidance on definition of systematic internaliser (SI) for all financial instruments.
Establish better balance between the need to support the ability of market participants to offer liquidity, and for better and more timely transparency for market as a whole.
Asset Classes in Transparency Scope
Specify classes of financial instruments having a strong case for minimum harmonised transparency requirements, for trading venues and to investment firms dealing OTC.
The asset classes for which FCA specify these minimum requirements are sovereign bonds, corporate bonds. and certain derivatives subject to the clearing obligation.
For those instruments, set large in scale (LIS) thresholds, above which orders benefit from pre-trade transparency waivers and trades have post-trade transparency deferral.
Exemption from Public Reporting
Investment firms which are dealing in instruments which FCA have not specified, will not be required to report their transactions to the public.
For trading venues, expect that adequate pre-and post-trade transparency is provided and set standards and criteria they will have regard to when calibrating transparency.
For Recognised Investment Exchanges (RIEs), the FCA approach to transparency will reflect high standards that apply to them for ETDs such as futures and listed options.
Pre vs. Post-trade Transparency
FCA is rebalancing the relative importance between pre-and post-trade transparency.
Places greater emphasis on quality and timelines of post-trade (rather than pre-trade).
Proposes simpler, more timely post-trade regime, with shorter deferrals for bonds and OTC derivatives, while ensuring that liquidity providers are protected from undue risk.
Definition of Systematic Internaliser
FCA proposes to expand on the definition of a systematic internaliser (SI) in UK MiFIR.
New definition based on qualitative criteria which aim to balance clarity for investment firms to decide if they are SIs, to flexibly apply to different markets, business models.
Guidance in Perimeter Guidance Material (PERG) will help interpretation of definition.
Consulation End
Consultation period on bond and derivative transparency has been extended by 2 weeks as it is being published during a busy time of the year; closes Mar. 6, 2024.
Nov. 2024 Policy Statement
On Nov. 5, 2024, UK FCA issued policy statement (PS) 24/14 which summarizes the feedback to the consultation, sets out final position on rules, guidance, and timeline.
Part of measures to reinforce UK's leading position in bond, derivatives and asset management sectors, also issued research payment consultation, see #232454.
Paper states that overall, respondents supported direction of travel of the proposals.
FCA broadly finalizes the proposed rules, with some changes, due to this feedback.
Has modified framework for bonds to have 3, rather than 2, deferral durations, and altered length of and threshold size for an order to qualify for those deferrals.
Refined grouping criteria for bonds, created longer deferrals for swaps with non-benchmark tenors, lowered threshold for Sterling Overnight Index Average swaps.
Removed systems relying on negotiation from scope of non-transparency, rather than requiring trading venues to apply for waiver from obligation re pre-trade transparency.
Firms do not need to report both the Unique Product Identifier (UPI) and International Securities Identification Number (ISIN), but only the UPI where one exists - that is, for OTC derivatives - and an ISIN otherwise.
The Markets in Financial Instruments (Non-Equity Transparency Rules) Instrument 2024 (FCA 2024/38) will make changes to the FCA HB to facilitate FCA's policy.
The Markets in Financial Instruments (Non-Equity Transparency Technical Standards) Instrument 2024 (FCA 2024/39) revokes Commission Delegated Regulation (EU) 2017/2194 on markets in financial instruments with regard to package orders.
And amends Commission Delegated Regulation 2017/577 on markets in financial instruments with regard to regulatory technical standards on the volume cap mechanism and provision of information for purposes of transparency, calculations.
The policy statement also includes a discussion chapter (Chapter 9) on the future of the SI regime in the UK, particularly for bonds and derivatives, see #253653.
Changes to the transparency regime come into force on Dec. 1, 2025, but under transitional provisions trading venues do not need to apply-pre-trade transparency to voice and request-for-quote trading from Mar. 31, 2025, and systematic internalisers in bonds and derivatives do not need to provide public quotes from Mar. 31, 2025.
May 2025 Editorial Update
On May 9, 2025, Reg-Track made changes to the rule type and effective date.
Also for clarify moved content regarding the SI regime in the UK to #253653.
In Feb. 2025, UK FCA issued policy statement PS25/1 Reforming the commodity derivatives regulatory framework, summarizing feedback to proposals, see #193506.
In Jul. 2025, UK FCA consulted on SI regime for bonds and derivatives, see #261519.
