FSA holds fire on electronic trading regulation

FSA holds fire on electronic trading regulation

Following a lengthy consultation with market participants, the UK's Financial Services Authority has stepped back from the imposition of new regulations on alternative trading systems and other market infrastructure providers (MIPs).

A review of the current UK regulatory approach was initiated last year to take stock of the rapid transition to electronic trading and the resultant changes in market structure.

In a feedback statement, the FSA summarises responses to a discussion paper it published last year and reports on recent European proposals for the regulation of alternative trading systems. The FSA says it is not proposing new rules or guidance, but notes that proposals for regulatory change in the UK might emerge in future.

The UK watchdog says it is working closely with other European regulators "to develop a consistent, proportionate and graduated regulatory approach to MIP regulation at the European level".

The Forum of European Securities Commissions, of which the FSA is a member, has recently proposed common European standards for the regulation of alternative trading systems and hopes to finalise these by the end of the year.

The FSA says it will consider whether new UK rules or guidance are needed to implement these standards and, if so, will publish a consultation paper in early 2002.

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