Key Takeaways
- • MFA submitted a comment letter to the Financial Conduct Authority (FCA) responding to consultation CP26/30 on equity market transparency and market structure, urging measures to lower trading costs, improve liquidity access, and strengthen UK market infrastructure.
- • MFA backs the FCA's view that current evidence does not justify restrictions steering trading toward particular venues or execution methods, arguing competition promotes innovation and lower costs.
- • MFA calls for addressing rising market data, connectivity and licensing fees, particularly for smaller asset managers, and for a reasonably priced equity consolidated tape.
- • MFA supports simplifying trade reporting and removing disproportionate requirements for algorithmic traders, but opposes extending public reporting to equity swaps at this time.
- • MFA supports pre-disclosed fallback arrangements for trading disruptions that protect the integrity of the official closing price, which underpins fund valuations, benchmarks and derivatives settlement.
Summary
The Managed Funds Association (MFA) has submitted recommendations to the Financial Conduct Authority aimed at strengthening UK equity markets, responding to the FCA's consultation on equity market transparency and market structure (CP26/30). According to the MFA, the recommendations are designed to make UK equities more attractive to investors by reducing trading costs, improving access to liquidity and strengthening market infrastructure.
MFA Chief Advocacy Officer Jillien Flores said global competition for investment and public listings is intense, and that deep, liquid equity markets are essential to attracting capital and keeping companies listed in the UK. Competitive trading options, affordable market data, reliable infrastructure and streamlined regulation, she said, can help the UK compete for global capital and remain a leading financial centre.
On execution, MFA agrees with the FCA that current evidence does not justify rules steering trading toward particular venues or execution methods, arguing that competition among trading methods drives innovation, reduces costs and helps managers achieve better outcomes for investors. On data costs, MFA asks regulators to address rising market data, connectivity and licensing fees that restrict access to liquidity, particularly for smaller asset managers. It suggests tying market data fees more closely to production costs and advancing a comprehensive, reasonably priced equity consolidated tape to give investors a market-wide view of trading activity.
On regulatory burden, MFA supports the FCA's proposals to simplify trade reporting and remove disproportionate requirements for algorithmic trading firms. It opposes, at this time, extending public reporting to equity swaps, which it says could duplicate existing transparency, expose sensitive trading information and raise costs for investors.
Finally, MFA supports clear, pre-disclosed fallback arrangements for trading disruptions that preserve the integrity of the official closing price, noting that this price underpins fund valuations, benchmarks and derivatives settlement relied on by institutional investors. MFA has more than 180 fund manager members, including hedge funds, private credit funds and hybrid funds.
MFA Chief Advocacy Officer Jillien Flores said global competition for investment and public listings is intense, and that deep, liquid equity markets are essential to attracting capital and keeping companies listed in the UK. Competitive trading options, affordable market data, reliable infrastructure and streamlined regulation, she said, can help the UK compete for global capital and remain a leading financial centre.
On execution, MFA agrees with the FCA that current evidence does not justify rules steering trading toward particular venues or execution methods, arguing that competition among trading methods drives innovation, reduces costs and helps managers achieve better outcomes for investors. On data costs, MFA asks regulators to address rising market data, connectivity and licensing fees that restrict access to liquidity, particularly for smaller asset managers. It suggests tying market data fees more closely to production costs and advancing a comprehensive, reasonably priced equity consolidated tape to give investors a market-wide view of trading activity.
On regulatory burden, MFA supports the FCA's proposals to simplify trade reporting and remove disproportionate requirements for algorithmic trading firms. It opposes, at this time, extending public reporting to equity swaps, which it says could duplicate existing transparency, expose sensitive trading information and raise costs for investors.
Finally, MFA supports clear, pre-disclosed fallback arrangements for trading disruptions that preserve the integrity of the official closing price, noting that this price underpins fund valuations, benchmarks and derivatives settlement relied on by institutional investors. MFA has more than 180 fund manager members, including hedge funds, private credit funds and hybrid funds.
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