Navigating financial transparency: Eyes on the horizon for Europe and the UK

Key Takeaways

• Market participants continue to face a rolling program of incremental regulatory changes, as both the UK and EU regimes evolve their rules for trade transparency.
• Ahead of the consolidated tapes, both regimes aim to improve visibility of market liquidity and accessible volume, reflecting the broader goals of MiFID II and MiFIR.

EU MiFID II review

Those keeping up with the MiFID II Review will know that it comprises a new directive and regulation amending EU MiFID II and MiFIR, and that it entered into force on 28 March 2024. Eighteen months later, and the application date of 29 September 2025 is upon us. As the revisions rely mostly on updates to relevant delegated acts and regulatory technical standards (RTS), the existing rules mostly remain in place until those texts are finalized. Several of the final revised RTS are now starting to come through.

Keeping up with the RTS

In December 2024, after months of consultation and discussion, ESMA published several Final Reports (FR), including draft RTS. The next step was for the European Commission (EC) to adopt them, which started in June this year. Once adopted, the process follows a 3-month objection period, taking us to September 2025, after which the RTS can be published in the Official Journal (OJ). When it arrives, this publication will set the final details for implementation. Some amendments can apply almost immediately, that is, 20 days from publication. Others provide varying application periods, for example, up to 18 months.

Since the days of MiFID II, having a plan in place for implementing change  rapidly without the final details or dates remains the business-as-usual approach for trading compliance technology solutions. At the time of writing, the upcoming revised RTS include technical standards to enable the creation of the long-awaited consolidated tapes. Other revisions include finer adjustments to RTS 1 and 2 relating to pre- and post-trade transparency to support the tape. According to the adopted texts, the EU changes to transparency apply from March 2026, but changes to SI obligations and minimum quote size apply 20 days after publication in the OJ.

Application dates can often be changeable feasts. Take, for example, the draft of RTS 3 that includes the EU’s latest changes to the double volume cap (DVC). This is still subject to adoption by the EC. However ESMA stated recently that, regardless of the final text’s status, the DVC changes will apply from 29 September 2025. ESMA operates the DVC on equities, and shares subject to suspensions cannot be traded under the reference price and negotiated trade waivers from pre-trade transparency. While the UK removed the dark trading caps several years ago post-Brexit, the EU continues to retain some restrictions. The latest EU rule refinement replaces the existing DVC, removing restrictions on negotiated trades and setting a single 7 percent EU limit on trading volume under the reference price waiver (RPW). The RPW is where the price is determined by reference to a price generated by another system, widely published and regarded as a reliable reference price.

As the review of 2018 MiFID II adjustments continues, some topics remain in the long grass subject to further analysis. For example, ESMA consulted in 2024 on transaction reporting. Given the feedback from the industry, ESMA has decided not to propose changes to the existing rules at this stage. Instead, they launched a new call for evidence to gather feedback on opportunities to simplify reporting. We can expect an outline of those proposals by the beginning of 2026.

UK review

Next up for market participants in the UK is the 01 December 2025 implementation of the FCA Policy Statement for improving transparency in bond and derivatives markets. The FCA is recalibrating the non-equity transparency regime, with amendments to liquidity calibration, deferral thresholds, and post-trade flags in the mix. The bond consolidated tape should follow once the changes to the transparency regime take effect.

The FCA has also been examining ways to improve UK transaction reporting and exploring changes to equity market structure. The next steps for these topics will be consultations.

Conclusion

Across jurisdictions, there is a common theme around regulatory efforts to improve post-trade transparency in financial markets – particularly ahead of any emerging consolidated tape. Both the UK and the EU continue to refine their rules, including the use of post-trade flagging for equity and non-equity trades to improve transparency.

As regulators continue to roll out the MiFIR reforms, market participants face a rolling program of incremental rule adjustments, with the usual regulatory planning challenges.

Ahead of the consolidated tapes, both the UK and the EU aim to improve visibility of market liquidity and accessible volume, reflecting the broader goals of MiFID II and MiFIR. Keeping one’s eyes on the horizon and monitoring all the moving parts is essential for market participants.