The MiFID transparency regime uses trading data from the UK and the EU. It currently operates by ESMA validating data on trading across the EU and performing various calculations to set assorted thresholds and make various determinations. If the UK leaves the EU without an implementation period agreed, the FCA will be solely responsible for operating the regime within the UK.
The on-shored UK regime provides the FCA with new decision-making powers as well as new obligations to operate the regime. This includes a degree of flexibility during a 4-year transitional period to allow the FCA to build the systems necessary to operate the system as ESMA currently operates it, and to change the regime if required given the possible move from an EU-wide trading data set to a UK-only data set.
The FCA’s Statements of Policy outline how it may expect to use the new powers. The statements should give further clarity to market participants about the FCA’s approach in advance of Brexit.
Statements of Policy on the operation of the MiFID Transparency Regime
