MFA Makes Recommendations to Strengthen UK Equity Markets

Calls for lower trading costs, improved access to liquidity, and stronger market infrastructure to help attract global investment

MFA made recommendations to strengthen UK equity markets in a comment letter submitted to the Financial Conduct Authority (FCA). The letter responds to the FCA’s consultation on equity market transparency and market structure (CP26/30).

“Global competition for investment and public listings is fierce,” said Jillien Flores, MFA Chief Advocacy Officer. “Deep, liquid equity markets are essential to attracting capital and making the UK an inviting place for companies to go and stay public. Competitive trading options, affordable market data, reliable infrastructure, and streamlined regulation can help the UK compete for global capital and remain a leading financial centre.”

MFA’s recommendations aim to make UK equities more attractive to investors by reducing trading costs, improving access to liquidity, and strengthening market infrastructure. The recommendations include:

• Preserve execution choice: MFA agrees with the FCA that current evidence does not justify restrictions that steer trading toward particular venues or execution methods. Competition among trading methods promotes innovation, reduces costs, and helps managers deliver better outcomes for investors.
• Reduce market data costs: Address rising market data, connectivity, and licensing fees that limit access to liquidity, particularly for smaller asset managers. Explore tying market data fees more closely to production costs and advance a comprehensive, reasonably priced equity consolidated tape to give investors a market-wide view of trading activity.
• Remove unnecessary regulatory burdens: MFA supports the FCA’s proposals to simplify trade reporting and eliminate disproportionate requirements for algorithmic trading firms. MFA also opposes extending public reporting to equity swaps at this time, which could duplicate existing transparency, expose sensitive trading information, and increase costs for investors.
• Strengthen market resilience: MFA supports clear, pre-disclosed fallback arrangements for trading disruptions that preserve the integrity of the official closing price. That price underpins fund valuations, benchmarks, and derivatives settlement relied on by institutional investors.

Read the full letter here.