On March 4, the United Kingdom Financial Conduct Authority (FCA) published a document containing statements of policy on how it intends to operate the transparency regime under the retained UK version of the European Union’s Markets in Financial Instruments Regulation (UK MiFIR), if the United Kingdom leaves the European Union without an implementation period.
The FCA states on a webpage related to the statements of policy that they outline how it will use its decision-making powers relating to the transparency regime in these circumstances. The FCA also notes that it will have a degree of flexibility during a four-year transitional period to allow it to build the systems needed as currently operated by the European Securities and Markets Authority and to change the regime if necessary to reflect a move from an EU-wide trading data set to one that is solely related to the United Kingdom.
The statements of policy cover the FCA’s approach to:
- Suspending the use of pre-trade transparency waivers for trading venues for the purposes of the double volume cap;
- Withdrawing a pre-trade transparency waiver granted for a trading venue in respect of non-equity financial instruments;
- Suspending the pre-trade transparency obligations for trading venues with respect to non-equity financial instruments and suspending the post-trade transparency obligations for trading venues with respect to non-equities;
- Determining the standard market size of equity instruments for the purposes of the pre-trade transparency regime for systematic internalizers;
- Suspending the post-trade transparency obligations for non-equity transactions taking place outside a trading venue; and
- Directing that an equity instrument is to be treated as not having a liquid market.