FCA acts to keep UK on top | ICLG

Keen to protect the UK’s position as a front-runner in the global financial services markets, the F…

Keen to protect the UK’s position as a front-runner in the global financial services markets, the FCA has published new rules for the bond, derivatives and asset management sectors.

The UK Financial Conduct Authority (FCA) has today (5 November) unveiled a new set of measures aimed at enhancing access to investment research and market data in the bond, derivatives and asset management sectors. The measures are a continuation of the FCA’s work to bolster UK wholesale markets while ensuring investors remain fully informed. 

In a press release, the FCA emphasised the importance of the measures in reinforcing the UK’s leading position in the bond, derivatives and asset management markets. In 2022, the UK accounted for 45.5% of global turnover in over the counter (OTC) interest rate derivatives, according to a Bank of England Survey, while a Statista report revealed that as of 2023, the UK ranked in the top six countries globally, with its bonds accounting for 3.3% of the global market.

“ENHANCE AND STREAMLINE”

Investors will have access to a greater supply of information and can expect reduced costs for firms with the FCA’s introduction of new transparency rules for bonds and derivatives markets.

The new bond and derivatives transparency rules will come into force on 1 December 2025 and provide investors with greater transparency in terms of information published to the market; lower compliance costs for investment firms and trading venues through regime simplification; and improved quality post-trade data in order to support the creation of the consolidated tape for bonds in the UK.

The consolidated tape, which will collate market data such as volumes and prices for trades in a financial market, is currently being established by the FCA with the goal of making UK markets more transparent and increasing liquidity.

The FCA finalised rules in July 2024 enabling institutional investors more flexibility in investment research payments, and following industry feedback, has announced its intention to extend flexibility in investment research payment to asset managers for pooled investment research.

Jon Relleen, director of supervision, policy and competition at the FCA, said: “We want UK markets to be efficient and to support economic growth. Putting more information in the hands of investors and giving investment firms greater access to research to inform their strategies will bolster UK markets.” He added: “We want to seize opportunities to enhance and streamline our rules and support the competitiveness of sectors in which the UK is already a recognised world leader.”