FCA Outlines Reforms to Enhance Transparency in UK Equity Markets

The Financial Conduct Authority (FCA) has unveiled a series of reforms aimed at enhancing transparency and access to information in the UK equity markets. This ambitious package includes the development of an equity consolidated tape within 18 months, targeting improved access to market-wide data and supporting investor confidence.

Understanding the Need for a Consolidated Tape

UK equity markets currently offer a wide array of trading options, fostering competition and innovation. However, this has also led to market fragmentation, which complicates obtaining comprehensive trading activity data. The FCA's proposed equity consolidated tape will combine market data into a single source, streamlining access to information and facilitating better decision-making for investors.

Market fragmentation often results in underused data, with the broader market's liquidity and depth going unnoticed. By providing a unified platform for pre-and post-trade data, the consolidated tape is expected to alleviate these challenges, enabling effective price formation and maintaining resilient markets.

Interim Measures and Market Activity Reporting

While the equity consolidated tape is being developed, the FCA has implemented an interim measure in the form of a market activity reporter for shares. This tool delivers a comprehensive view of daily UK equity market activity, allowing market participants to gain insights into trading volumes.

The interim solution complements the ongoing development of the consolidated tape by ensuring transparency and continuity in market data access until the full system is operational.

Wider Capital Markets Reform

The introduction of the equity consolidated tape follows the successful launch of the UK bond consolidated tape in June 2026. This program is part of the FCA's broader strategy to improve transparency and bolster confidence across UK capital markets, ultimately attracting global investors.

The package reflects positive feedback from market participants, supporting the FCA's evidence-based reform approach. It aligns with operators' needs to view the entire market scope, further enhancing the transparency of UK equity markets.

Industry Feedback and Consultation

The FCA is welcoming feedback on the reforms, specifically consultations CP26/30 and CP26/31, with a deadline of 16 October 2026. These discussions are crucial for refining the transparent frameworks and market structure reforms aimed at sustaining effective UK equity markets.

Consideration of feedback will precede the procurement process for selecting a provider for the future equity consolidated tape, ensuring that chosen solutions meet market needs.

Simon Walls, Executive Director of Markets at the FCA, emphasized the importance of these initiatives:

'UK equity markets have evolved through competition, innovation, and investor choices. These factors continue to underpin a liquid and resilient market. A consolidated tape simplifies transparency and provides a clearer market picture.'

Industry Support and Perspectives

Reaction from industry leaders has been positive. Adam Farkas, CEO of the Association for Financial Markets in Europe (AFME), expressed support, highlighting the practical steps taken to improve market data access. Hugo Gordon from the Investment Association commended the package's focus on pre-and post-trade data consolidation, foreseeing better transparency and efficiency.

David Raw from UK Finance noted the package's role in maintaining the UK's appeal to global investors by ensuring competitive and diverse markets. Including comprehensive data in the consolidated tape is seen as essential for price formation and increased investment.

The FCA's reforms present a significant step forward in strengthening the transparency and resilience of UK equity markets. As the consultation process moves forward, the focus will be on delivering a practical and effective implementation that aligns with the evolving needs of market participants.