CP25/20: The SI regime for bonds and derivatives including Discussion Paper on equity markets

Read CP25/20

Why we are consulting

Given the removal of pre-trade transparency from systematic internalisers’ obligations in bonds and derivatives, we are consulting on the future of that regime now. This will allow us to give effect to new SI rules in Q4 2025 and ensure a timeline that allows for continued alignment between the transparency and SI regimes.

This consultation also provides an opportunity to deliver on three further areas. We are consulting on:

• the removal of the prohibition on matched principal trading by firms operating a multilateral trading facility (MTF).
• changes to reference price waiver rules to allow trading venues greater flexibility.
• removal of the prohibition on an investment firm that is an SI from operating an organised trading facility (OTF). 

These changes are intended to support competition, reduce unnecessary complexity and improve market resilience.

In addition to consulting on these proposed rule changes, we are using this publication to start a broader discussion on the structure and transparency of the UK equity market.

Who this is for

This consultation and discussion paper will primarily be of interest to: 

• systematic internalisers in all asset classes
• trading venues
• UK branches of overseas firms undertaking investment services and activities
• investment firms

Our changes will also interest Approved Publication Arrangements (APAs), law firms, market data and analytics firms, consultancies, retail investors and trade associations.

Next steps

Send us your comments by Wednesday 10th September 2025 by sending them to us: 

• by emailing: [email protected]
• in writing to: Stephen McGoldrick, Financial Conduct Authority, 12 Endeavour Square, London E20 1JN

Based on the responses we receive, we will finalise the proposed changes in a policy statement in Q4 2025. We will use the responses to the discussion questions on the equity market to inform the proposals that we intend to consult on in 2026.

Background

The new bond and derivatives transparency requirements set out in PS24/14 will come into force in December 2025. This includes important changes to the pre-trade requirements for trading venues and systematic internalisers. Given the removal of pre-trade transparency from SIs’ obligations in bonds and derivatives, we are consulting on the future of that regime now.  

This consultation also provides an opportunity to deliver on 2 commitments made under the Wholesale Markets Review (WMR):

1. WMR concluded that the prohibition on matched principal trading by firms operating an MTF is an unnecessary and costly constraint. We are proposing to remove it.
2. WMR said we would consult on changes to reference price waiver rules to allow trading venues greater flexibility in its use. We are doing so now.

Finally, given the proposed removal of SI regime for bonds and derivatives we are proposing removal of the prohibition on an investment firm that is an SI from operating an OTF.