FIA EPTA welcomes the FCA’s proposals on improving bonds and derivatives transparency. Our members are very supportive of both the ambition and simplicity shown regarding both pre-trade and post-trade transparency. A less complex regime will be easier for firms and trading venues to comply with and administer and above all will make UK capital markets more attractive. The inclusion of sovereign bonds in this ambitious framework is a particularly innovative step and will support the growth and competitiveness of UK capital markets with tangible benefits to the real economy.
Our members believe that a fully operative and genuine post-trade transparency provides significant advantages for both retail and institutional investors such as better, more reliable pricing, lower transaction costs and better liquidity across all trade sizes, including the largest-sized block trades. In this regard, we support a post-trade deferral model which prioritises real-time publication of price and volume with deferrals of no longer than End of Day. In particular, it is crucial that price information is made available no later than End of Day in order to support the FCA’s stated objectives of improving price formation and increasing participation and confidence in the market.
An ambitious transparency regime will also support the success of the UK consolidated tapes for bonds and derivatives by providing meaningful data for publication. A successful CT will further support the growth, resilience and competitiveness of UK capital markets and we welcome the steps being taken to by the FCA to bring this into fruition.
We support the FCA’s proposals to empower trading venues to calibrate transparency for “Category 2” instruments, including exchange-traded derivatives. However, in this regard, we note the importance of ensuring a robust and consistent supervisory approach is adopted to ensure strict adherence to the FCA’s proposed principles for calibration.
