On 4 March 2019, UK FCA issued its statements of policy on operation of transparency.
- MiFID transparency regime was calibrated using trading data from EU including the UK.
- It currently operates by ESMA validating data on trading across the EU and performing various calculations to set the assorted thresholds and make various determinations.
- If the UK leaves the EU without an implementation period agreed between UK and the EU, the UK will be solely responsible for operating the transparency regime within UK.
- Onshored UK regime provides FCA with new decision-making powers, new obligations.
- This includes a degree of flexibility during a 4-year transitional period to allow them to build systems necessary to operate the system in same way as ESMA currently does.
- And also to change the regime if need be given the possible move to UK-only data set.
- Statements of policy outline how FCA may expect to use these new powers, and give further clarity to market participants regarding the FCA approach in advance of Brexit.