HM Treasury has published a policy paper announcing further reforms to the U.K.'s wholesale markets framework, a key part of the latest Mansion House reforms HM Treasury has committed to legislate to amend the Markets in Financial Instruments legislative package to achieve these changes. Where the changes involve revoking existing legislation and placing it in the Financial Conduct Authority's Handbook, the revocation will coincide with the regulator's rules taking effect.
Firstly, the FCA will be given enhanced powers of direction regarding the reporting of OTC positions. This is intended to address issues that arose in the Nickel market in 2022 by empowering the FCA to ensure that exchanges receive the right transparency about OTC positions and enable exchanges to operate their position management obligations effectively. The FCA will be able to intervene where it considers there is a risk to market stability.
Second, legislation will be introduced revoking the transaction reporting provisions in MiFIR and delegating to the FCA the responsibility for establishing rules for the regime. It is envisaged that the FCA will be in a better position to consider long-term solutions to the challenges facing firms in complying with the existing regime.
Finally, the detailed firm-facing requirements contained in the MiFID Org Regulation will be revoked and replaced in the FCA's Handbook. This will give the FCA more flexibility to adjust to changing conditions requiring the standards to be updated.
[View source.]
