Financial Services and Markets Act 2023

Prospective

Transparency requirements for fixed income instruments and derivatives etc U.K.

7 For Articles 8 to 11 substitute—

“Article 8 U.K. Pre-trade transparency requirements for fixed income instruments and derivatives etc

1. The FCA must by rules impose pre-trade transparency requirements on relevant persons in respect of the trading of such relevant instruments as the FCA determines should be subject to the requirements for the purposes of furthering—

(a) efficient price formation, and

(b) the fair evaluation of financial assets.

2. The power to make rules under paragraph 1 is exercisable only if the FCA considers that the rules are necessary or expedient for the purpose of advancing one or more of its operational objectives referred to in section 1B(3) of FSMA.

3. In making rules under paragraph 1 the FCA must (in particular) have regard to the impact that requirements imposed by the rules will have on market liquidity.

4. The reference in paragraph 1 to “pre-trade transparency requirements” is a reference to whatever kinds of requirements relating to transparency before trading that the rules may specify, for example—

(a) requirements to make public matters specified in the rules in respect of the trading of relevant instruments;

(b) requirements about the means by which, and the times at which, such matters are to be made public;

(c) requirements for the giving of access to the arrangements employed for the making of such matters public;

(d) requirements in respect of relevant instruments that are traded in a standardised and frequent way, if not subject to disclosure requirements of the kind mentioned in sub-paragraph (a).

5. Rules under paragraph 1 may—

(a) impose requirements by reference to the types of trading system used;

(b) impose different requirements in relation to different types of trading system;

(c) provide for the criteria by which the determination referred to in that paragraph is to be made.

6. In this Article and in Article 9—

• “relevant instruments” means bonds, structured finance products, emission allowances, derivatives and instruments included within package orders;

• “relevant persons” means market operators and investment firms operating a trading venue.

Article 9 U.K. Article 8: waivers or suspensions for fixed income instruments and derivatives etc

1. Rules under Article 8 may include provision for any requirements imposed by the rules to be waived in such cases, and to such extent, as may be determined by or under the rules.

2. Rules that include provision under paragraph 1 may impose whatever conditions on the application of a waiver the FCA considers appropriate.

3. The FCA may by notice given to a relevant person withdraw a waiver granted by virtue of paragraph 1 if the FCA considers that the waiver is being used—

(a) in a way that deviates from its original purpose, or

(b) to avoid requirements provided for in the rules.

4. The FCA may by notice suspend requirements imposed by rules under Article 8 in the case of such relevant instruments, or class of relevant instruments, as may be specified in the notice.

5. A notice under paragraph 4 suspending requirements—

(a) may be given subject to conditions;

(b) must specify the period for which the suspension has effect;

(c) must be published in the manner appearing to the FCA to be best calculated to bring it to the attention of persons likely to be affected by it;

(d) may be varied or withdrawn by the giving of a further notice (and sub-paragraph (c) applies to any such notice).

6. The power under paragraph 4 to suspend requirements is exercisable only if the FCA considers that it is necessary to do so to advance the FCA’s integrity objective under section 1D of FSMA.

7. In deciding whether to exercise the power under paragraph 4 to suspend requirements the FCA must also have regard to—

(a) its consumer protection objective under section 1C of FSMA, and

(b) its competition objective under section 1E of FSMA.

Article 10 U.K. Post-trade transparency requirements for fixed income instruments and derivatives etc

1. The FCA must by rules impose post-trade transparency requirements on relevant persons in respect of the trading of such relevant instruments as the FCA determines should be subject to the requirements for the purposes of furthering—

(a) efficient price formation, and

(b) the fair evaluation of financial assets.

2. The power to make rules under paragraph 1 is exercisable only if the FCA considers that the rules are necessary or expedient for the purpose of advancing one or more of its operational objectives referred to in section 1B(3) of FSMA.

3. In making rules under paragraph 1 the FCA must (in particular) have regard to the impact that requirements imposed by the rules will have on market liquidity.

4. The reference in paragraph 1 to “post-trade transparency requirements” is a reference to whatever kinds of requirements relating to transparency after the execution of trades that the rules may specify, for example—

(a) requirements to make public matters specified in the rules in respect of the trading of relevant instruments (including the price, volume and time of transactions);

(b) requirements about the means by which, and the times at which, such matters are to be made public;

(c) requirements for the giving of access to the arrangements employed for the making of such matters public.

5. Rules under paragraph 1 may—

(a) impose requirements by reference to the types of trading system used;

(b) impose different requirements in relation to different types of trading system;

(c) provide for the criteria by which the determination referred to in that paragraph is to be made.

6. In this Article and in Article 11—

• “relevant instruments” means bonds, structured finance products, emission allowances, derivatives and instruments included within package transactions;

• “relevant persons” means market operators and investment firms operating a trading venue.

Article 11 U.K. Article 10: deferrals and suspensions for fixed income instruments and derivatives etc

1. Rules under Article 10 may include provision authorising relevant persons to defer complying with requirements imposed by the rules in such cases and to such extent as the rules may specify.

2. Rules made by virtue of paragraph 1 may impose whatever conditions on the application of a deferral the FCA considers appropriate.

3. The FCA may by notice suspend any requirements imposed by rules under Article 10 in the case of such relevant instruments, or class of relevant instruments, as may be specified in the notice.

4. A notice under paragraph 3 suspending requirements—

(a) may be given subject to conditions;

(b) must specify the period for which the suspension has effect;

(c) must be published in the manner appearing to the FCA to be best calculated to bring it to the attention of persons likely to be affected by it;

(d) may be varied or withdrawn by the giving of a further notice (and sub-paragraph (c) applies to any such notice).

5. The power under paragraph 3 to suspend requirements is exercisable only if the FCA considers that it is necessary to do so to advance the FCA’s integrity objective under section 1D of FSMA.

6. In deciding whether to exercise the power under paragraph 3 to suspend requirements the FCA must also have regard to—

(a) its consumer protection objective under section 1C of FSMA, and

(b) its competition objective under section 1E of FSMA.”

Commencement Information

I1 Sch. 2 para. 7 not in force at Royal Assent, see s. 86(3)