The FIX Trading Community has responded to the FCA’s consultation paper on the SI regime for bonds and derivatives, calling for legacy issues to be addressed to improve post-trade transparency.
The FCA’s paper focuses on the SI regime for bonds and derivatives, with questions on equity markets included to inform an upcoming 2026 consultation on the asset class.
One transparency problem highlighted by the committee is duplications in trade reporting, which artificially inflates volumes. FIX recommends that off-venue EU trade reports should be recognised in the UK to reduce complexity.
In its response to the FCA, the committee said, “By suppressing the duplicate reporting, the FCA would not lose sight of the transaction (as it will still be eligible for Transaction Reporting in the UK) while the exemption would guarantee that trades executed in the EU do not inflate the OTC volumes published on the UK APA.”
FIX also suggests that there should be greater clarity around what can be flagged as a non-price forming transaction (NPFT). It states that NPFT transactions related to clearing and settlement activities should be omitted from the tape, as they do not provide information value for trading purposes.
Additionally, the committee raised a concern of its members that off-venue trade reports should include execution methodology.
It noted, “Manual benchmark trades have different accessibility profiles compared to systematically traded automated services. Our members would welcome a method for distinguishing between these trade types to support more accurate categorisation of accessibility, along similar lines to the “ALGO” flag mandated for on venue activity.”
The group has previously called for a stronger take-up of voluntary flags, stating that these would improve reporting transparency – particularly with the upcoming introduction of UK and EU consolidated tapes.
READ MORE: Budgets curtail MMT voluntary flag take-up, FIX says
FIX also recommends that separate market identifier codes (MICs) should be used for mid-point and lit trading activity. This would ensure that market data quality is maintained following a proposal to reformulate the reference price waiver rules, which are intended to grant trading venues greater flexibility.
Considering other post-trade reporting issues, FIX called for clear and accessible data visualisations under the consolidated tape, alongside regulatory clarity around chain of order reporting requirements and cross-border reporting requirements.
Recent research from Global Trading highlighted the difficulties of handling post-trade data, and integrating it into future trading decisions.
READ MORE: Trading under the microscope
FIX executive director Kaye noted, “Post-trade data quality issues create noise that makes it difficult for investors to make an accurate assessment of market depth and liquidity,” he said. “We have recommended clearer definitions and consistent use of trade flags to eliminate noise — such as non-price-forming or duplicative trades — and improve data quality, which in turn will improve investor confidence in market data.”
