The FCA has announced a comprehensive suite of measures aimed at reinforcing the UK’s position as a frontrunner in the financial markets, specifically focusing on the bond, derivatives, and asset management sectors.
These initiatives are designed to promote economic growth by enhancing transparency and reducing operational costs for firms.
Under the new guidelines, transparency in the bond and derivatives markets will be significantly improved, giving investors access to more timely and detailed information. This enhancement is expected to foster greater efficiency within these markets. Additionally, the FCA is introducing simpler compliance procedures that will lower costs for trading venues and investment firms.
The regulatory body is also focusing on the quality of post-trade data, which will aid in the development of a consolidated tape for bonds within the UK, ensuring that investors can obtain data that is both quicker and clearer at a fair price.
In a strategic move to further support the investment landscape, the FCA has finalised regulations as of July 2024 that allow more flexibility for institutional investors concerning payment for investment research. Following industry feedback, these freedoms are set to be extended to pooled investment funds. This will enable fund managers to amalgamate payments for research with trade execution, adhering to specific conditions to ensure transparency and fairness.
Jon Relleen, director of supervision, policy and competition at the FCA, emphasized the authority’s commitment to efficiency and growth. “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,” Relleen stated. He further highlighted the FCA’s proactive approach in enhancing and streamlining rules to boost the competitiveness of sectors where the UK already excels globally.
This package of measures by the FCA underscores its ongoing effort to strengthen wholesale markets and ensure that investors are well-equipped with essential information for making informed decisions.
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