Statement on the Operation of the MiFID Markets Regime

We have published a Supervisory Statement[1] to help market participants understand our approach to the operation of the MiFID regime after the end of the transition period. The statement covers a range of issues including the Double Volume Cap, transparency waivers and deferrals, equity transparency, bond transparency, derivatives transparency and commodity position limits.

This statement replaces similar statements we issued in March and October 2019. It is part of our necessary preparations for the possibility that at the end of the transition period there is not a free trade agreement between the UK and EU and no mutual equivalence decisions in areas relevant to the MiFID Markets Regime. Therefore, it may be subject to change in the event of a free trade agreement being reached and mutual equivalence decisions being taken. We may also revise our approach as market conditions develop.

Update 09 August 2021 – Quarterly bonds published

We have published the latest quarterly bonds liquidity determination. These results are available on FCA FITRS[2] and will apply from 16 August 2021 to 15 November 2021.

Update 10 May 2021 – Non-equity calculations published

We have published non-equity transparency results for the UK[3]. These results cover the 2021 annual bonds threshold assessment, the May 2021 quarterly bonds liquidity determination and the 2021 annual derivatives threshold and liquidity assessment.

Update: 4 March 2021 – Double Volume Cap (DVC)

We have revised the Supervisory Statement[1] as it relates to the DVC because of a change to our Statement of Policy on the use of our temporary powers under UK MiFIR in respect of the DVC. 

Update: 2 February 2021 – Trading of Swiss shares

Pending Parliamentary approval of HMT’s equivalence decision and action by the Swiss Government, it will soon be possible for UK firms to meet their obligations under the share trading obligation on Swiss exchanges and for UK trading venues to be able to offer trading in Swiss shares. We are confirming, consistent with the above Supervisory Statement, how aspects of UK markets regulation will apply to Swiss shares that resume trading on UK trading venues.

Transparency

For the purposes of calibrating the pre and post-trade transparency regime, Swiss shares that resume trading on UK trading venues will be treated as if they are being traded on a UK trading venue for the first time. An estimate will be made of the relevant parameters based on the characteristics of the shares to apply from their first day of trading. These estimates will then be updated after 6 weeks based on data from the first 4 weeks of trading in the UK.

Tick sizes

The same logic as for transparency parameters will apply for tick sizes, with an initial estimate updated after 6 weeks by a calculation based on data for the first 4 weeks of trading in the UK. These figures may result in different tick sizes than currently apply for trading of these instruments on exchanges in Switzerland. UK trading venues will be allowed to use the minimum tick size that applies in Switzerland where that is smaller than the minimum tick size based on the figures for the average daily number of transactions (ADNTE) that we publish through our Financial Instruments Transparency System (FITRS).