On March 1, AFME and Linklaters held a conference to discuss the Future of wholesale financial markets in the UK. Discussions on the day centred around a speech from John Glen, Economic Secretary to the UK Treasury and City Minister, announcing reforms to capital markets regulation and listing rules changes in the UK.  

With Secretary Glen announcing that some powers will soon be devolved to the UK markets regulator, the Financial Conduct Authority (FCA), the first panel of the day featured discussions between the FCA’s Fabio Braga, Manager – Trading and Wholesale Conduct Policy and capital markets participants, explaining the intention behind the announced reforms.  

Braga highlighted plans for establishing a markets advisory committee to support FCA work in delivering the targeted changes. He admitted that while the FCA has been good at engaging with market participants, this is the right time to establish a permanent committee to not only provide feedback on policy proposals, but to help the FCA in the early stages of drafting policy. Braga then outlined that the FCA would perform targeted changes in relation to pre-trade and post-trade regimes for fixed income trading, to name a few. 

Following Braga’s comments, panellists from Citi and Barclays reiterated the need for change in Europe’s pre-trade transparency regime for fixed income markets. They highlighted that the data being provided in compliance with the MiFID regime is being left unused by market participants, with the production of the data itself involving trading risk for their firms.  

Matthew Coupe, Director, Global Head of Cross Asset Market Structure, Markets EMEA, Barclays, described the existing MiFID transparency regime as a “plate of spaghetti” due to its complexity.  Ashlin Kohler, Director, EMEA Rates eCommerce, Citi, added that the regime could do with being simplified and the regime should be led by data, focusing the regime on instruments that participants care about.  

The second half of the conference discussed the technical impact of the changes set out by the UK Treasury for equities markets. On the panel, Claudia Trauffler, Head of Capital Markets, Securities and Markets, HM Treasury, provided an overview of the changes planned, emphasising that systematic internalisers will be allowed to execute at the mid-point and the calibration of pre-trade waivers will be delegated to the FCA. Market participants from the buy and sell sides expressed their support for the proposed changes and reiterated the importance of speed on the topic of implementing a consolidated tape.  

Wrapping up proceedings, Edwin Schooling Latter, Director of Markets and Wholesale Policy and Wholesale Supervision at the FCA, delivered a speech, highlighting FCA plans in 2022 to change elements of the UK equity market and other areas of potential change. 

To those unable to attend the conference, the full recording is now available online here.