Regulation matters: the near horizon for Europe in 2024

January 18, 2024

New EU transparency-related changes applied from 1 January 2024. To comply, EU venues, their members and service providers have been busy in recent months making changes to their trade reporting and market data products.

This initial round of EU changes comprised low-level detail adjustments to improve post-trade data quality. This is primarily to ease data consolidation once any EU consolidated tape gets off the ground in the next few years. The first authorization of an EU tape provider is anticipated to come late in 2025.

The European Parliament voted to approve the amendments for the wider MiFID II review on 16 January, following good progress made in negotiations last October. Once published in the Official Journal, this will trigger the transposition countdown. 2024 will likely be a year of consultation around the related regulatory technical standards (RTS), digging into the details.

Upcoming UK changes

In the UK the Financial Conduct Authority (FCA) also plans to make changes to post-trade transparency, with implementation set for April. Again, we can expect UK venue changes to trade reporting and market data.

FCA changes due to be implemented on 29 April 2024 include:

  • Changes to the scope of exemptions from trade publication for some non-price forming off-exchange trades.
  • A new post-trade transparency deferral regime for ETF transactions executed at net asset value (NAV).
  • Post-trade flag changes, including a new flag for OTC/SI benchmark trades concluded at market closing price and for portfolio trades; a new flag for negotiated trades, replacing the existing more granular flags; deletion of various other flags for systematic internalisers and agency crosses.
  • A new flag for negotiated trade large in scale.
  • Published price and published price currency are clarified as in ‘major’ currency unit.​ (relevant to some published/regulatory Market Data feeds).
  • A new designated reporter regime (DR) for off-exchange trade reporting.

The FCA previously published details on how firms can register as a UK DR for off-exchange trade reporting from April. Few have registered so far, which could indicate some uncertainty about how the new regime would operate.

Transform exchange and regulatory changes from overheads into opportunities with Fidessa

As with every rollout of regulation change, if financial firms are to meet the deadlines, it’s crucial they constantly scan a wide horizon and keep on top of developments as and when they happen. It’s good to work with trusted partners, who can keep up with the constant cycle of changes and understand the potential impacts on your business.

At ION Markets, we’re always working to ensure our customers meet their regulatory obligations. Our Fidessa service is fully managed, ensuring that your equities trading solution always incorporates the latest regulatory updates. Frequent upgrades deliver reliability via comprehensive regression testing. This model helps to transform exchange and regulatory changes from overheads into opportunities.

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