HM Treasury’s Wholesale Markets Review: next steps

On 1 March 2022 HM Treasury published its response to its 2021 Wholesale Markets Review consultation and announced that it is taking forward proposed reforms to the UK’s financial services regulatory framework for capital markets established by the EU Markets in Financial Instruments Directive (MiFID). Some of the changes will result in divergence from the EU regime.

The planned changes include:

  • simplification of the systematic internaliser (SI) regime reverting to a qualitative definition of SIs;
  • removing matched principal trading restrictions for investment firms operating a trading venue and allowing organised trading facilities (OTFs) to execute transactions in equities when dealing in packages;
  • delegation of the pre-trade equity waivers regime the transparency regime for fixed income and derivatives markets and responsibility for consolidated tape providers to the Financial Conduct Authority (FCA);
  • aligning the scope of the derivatives trading obligation...