Improvements to equity secondary markets

The changes[1] are part of the Wholesale Markets Review, which we have been conducting alongside government. We are tailoring our rules to better suit UK markets and to promote competition and growth. 

We previously consulted[2] on rule changes for secondary markets, including on the transparency regime for equity markets. 

They will:

• enhance the quality of trade execution for investors by lowering the cost of trading, reducing market impact and ultimately increasing liquidity 
• improve the content and consistency of post-trade transparency for equities
• simplify the reporting of transactions executed over-the-counter (OTC) for all financial instruments
• improve choice and competition by allowing UK trading venues to reference prices from overseas venues, where those prices are robust, reliable, and transparent
• enhance the quality of execution by removing restrictions preventing trading venues from using the same tick size used by trading venues established overseas 

As part of these changes, we are introducing a new Designated Reporter (DR) regime, clarifying who holds the obligation of making sure that a trade is made public. It aims to establish a simpler and clearer regime for the reporting of OTC transactions. 

The amended post-trade transparency requirements, including the DR regime, will come into force in April 2024, whilst all our other rule changes come into force immediately.

We will support the development of industry-led good practices to improve market-wide resilience during trading venue outages. We will further engage with stakeholders to determine whether a formal review is required on how well the UK market for retail orders works.

We have also proposed reforms[3] to make the UK listing regime more effective, easier to understand and competitive.

Our work on the wholesale markets review and proposed listing reforms supports our commitment to strengthen the UK’s position in wholesale markets, a key priority in our 3-year strategy[4].