Sell-side trade body the Association for financial markets in Europe (AFME) has voiced support for the UK Financial Conduct Authority’s (FCA) consultation on the future of the SI regime closed on 10 September, which proposed to end the SI regime for bonds, derivatives, structured finance products and emission allowances.
AFME has said it wants the complete removal of the non-equity SI regime. In its response to the consultation, it says that earlier reforms, including the designated reporter regime (DRR) and changes to transparency requirements, have eliminated the very need for the regime.
“AFME members fully agree with the complete removal of the regime for bonds, derivatives, structured finance products and emission allowances,” it said.
However, EPTA, the European principal trading association, representing the largest alternative liquidity providers in Europe (excluding Jump Trading) has a different view. In its answer, it recommends that the FCA retain the SI regime for bonds derivatives et al on a opt in basis like in Europe.
EPTA said “Our members see SIs as a positive construct which brings transparency, along with more formalized and democratic access, to bilateral risk facilitation.”
The consultation also asked about permitting matched-principal trading by multilateral trading facilities (MTFs) and allowing SIs to operate organized trading facilities (OTFs), as well as broadening away from primary equity exchanges how venues source the mid-price under the reference price waiver. The FCA said it will use the equity discussion to inform a future equity transparency consultation in 2026.
In the EU, following the MiFIR review, the Si regime is now an opt-in construct and does not rely anymore on public systematic internaliser calculations.
Read more: FCA consultation lays ground for ending bond SI regime
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