The Global Foreign Exchange Division of the Global Financial Markets Association, together with the International Swaps and Derivatives Association, submitted a response to the UK Financial Conduct Authority’s CP25/20 consultation on the systematic internaliser (SI) regime for bonds and derivatives, strongly supporting the removal of the SI regime for OTC derivatives and endorsing its wider removal for other non-equity products. The Associations asked the FCA to confirm that investment firms will no longer be able to opt in as SIs for derivatives, bonds, structured finance products and emission allowances, citing proposed FCA Handbook changes that appear to limit SI-related notifications and reference data connectivity obligations to equity SIs. They also proposed amending the FCA Glossary test for when dealing is “organised, frequent, systematic and substantial” so it is clearly tied to “equity transparency” instruments, and flagged residual SI references in the UK Benchmark Regulation that they believe should be removed as part of HM Treasury’s review. To reduce residual obligations and reporting ambiguity, they recommended deleting non-equity entries from the SI Register from 1 December 2025 and treating off-venue non-equity trades as XOFF for UK MiFIR and EMIR reporting. The response further supported removing the prohibition on an SI operating an organised trading facility and, in principle, lifting the ban on matched principal trading by multilateral trading facility operators, while opposing the inclusion of equity swaps in cash equity post-trade transparency or the equity SI regime on the basis of complexity and risk of distorting published liquidity signals. They urged that any SI regime changes be coordinated with the new non-equity transparency requirements under PS24/14 that take effect on 1 December 2025 to avoid uncertainty and additional compliance burden.
Global Financial Markets Association 2025-09-10
Global Financial Markets Association backs Financial Conduct Authority proposal to remove systematic internaliser regime for derivatives and other non-equity instruments
The Global Foreign Exchange Division and the International Swaps and Derivatives Association responded to the UK FCA's consultation, advocating for removing the SI regime for OTC derivatives and non-equity products. They suggested limiting SI obligations to equity instruments and deleting non-equity entries from the SI Register by December 2025, while supporting coordination with upcoming transparency requirements.