Impact of FCA Post-Trade Transparency Changes

This technical report discusses the first edition of The View, a quantitative research series from the London Stock Exchange, focusing on the effects of the updated FCA post-trade transparency regime on market data. The report outlines significant changes in trading volumes and classifications following the regulatory updates that took effect on April 29, 2024. It details the introduction and removal of various flags affecting trade reporting and highlights the observed decline in total reported trading volumes for FTSE 100 stocks, averaging a 25% drop. The report also presents data on the decline of OTC trade volumes, which fell by 57%, and discusses the implications of these changes for market participants. Additionally, it addresses the new Designated Reporter Regime and the importance of understanding the definitions of total versus addressable volumes in trading strategies. The report emphasizes the necessity for traders to be aware of the datasets they are utilizing to ensure appropriate application to their specific use cases.