Markets View - September 2026

Welcome to the latest edition of Markets View! Autumn may be setting in, but there’s no sign of the regulatory calendar cooling off. Here's what's inside this month’s edition:

• The FCA's Decision to accept commitments from commodity futures traders
• ACER's focus on algorithmic trading under REMIT
• The Commission's proposed EU ETS overhaul
• ESMA's consultation on TC-CCP annual reporting under EU EMIR
• The FCA's streamlined UK transaction reporting regime
• The FCA's consultation on equity market transparency
• The FCA's framework for the UK equity consolidated tape

FCA rakes in commitments from commodity futures traders

What’s the background?

The traders (each operating as independent contractors of a trading arcade and members of a trading group called Futures Trading Facilities Ltd) traded commodity futures – primarily energy futures such as gas oil, natural gas and crude oil – using their own funds. They traded through an anonymous order book on exchange, meaning they should have been competing independently by deciding their own trading strategies.

What were the FCA’s concerns?

The FCA suspected that during the period from November 2019 to May 2020, the traders may have infringed the Chapter I prohibition (which prohibits anti-competitive agreements and concerted practices) by:

• Exchanging competitively sensitive information: The group exchanged details of their future trading intentions, current positions and recent orders or trades.
• Coordinating their trading strategies: The group explicitly planned respective strategies and coordinated “in the moment” on trading intentions.

The FCA’s view was that this conduct may have reduced or removed uncertainty on the market, enabling traders to better assess the risks or rewards of their positions based on information they should not have had.

What are the commitments?

Rather than pursuing a formal infringement finding, the FCA accepted commitments from all eleven traders. The key terms are:

• Information exchange commitment: Each trader has committed not to disclose or accept specified categories of competitively sensitive information about commodity futures tradeable in or from the UK unless it is publicly available. Limited exceptions apply.
• Payment commitment: The traders will arrange an aggregate ex gratia payment of £1 million to be disbursed to the Crisis and Resilience Fund (a government fund supporting communities facing financial hardship, including help with energy bills). Notably, the FCA considers this exceeds the likely total penalty it could have imposed under the statutory penalty cap.
• Compliance training commitment: Each trader must attend annual competition law compliance training (delivered by a qualified lawyer) in any year in which they trade relevant products. The trainer must confirm in writing that the trader’s practical arrangements comply with the Information Exchange Commitment.

The commitments run for 5 years, are legally binding and are backed by annual compliance statements and reporting obligations.

Key takeaways.

The decision offers a clear signal that the FCA will use its competition enforcement powers in financial markets, including against individual traders, and that exchanging information about trading positions and strategies between competitors can attract serious scrutiny. Market participants should review their communication practices and information-sharing arrangements to ensure they are not inadvertently crossing the line. If in doubt, competition law compliance training of the kind required by these commitments is a good starting point.

Algo watch: ACER Digs into Algo Trading under REMIT

Automated systems now account for an increasingly high share of trade volume in European wholesale energy markets under REMIT – including roughly 70% of all analysed behaviours linked to market manipulation. Against that backdrop, and with geopolitical uncertainty heightening scrutiny of wholesale energy markets, ACER is stepping up its monitoring of algorithmic trading.

ACER recognises that algo trading brings efficiency and liquidity benefits, but the numbers speak for themselves: since 2020, between 50% and 71% of notifications issued to National Regulatory Authorities (NRAs) have involved algorithm-associated behaviour.

From 29 October 2027, Commission Implementing Regulation (EU) 2026/256 will require market participants to include an Algorithm ID in REMIT transaction reporting, enabling supervisors to distinguish more clearly between human and algorithm-driven activity.

Meanwhile, in its latest REMIT Quarterly, ACER discusses how it's enhancing surveillance to catch potentially abusive patterns, by looking at high order-to-trade ratios, rapid order entry and cancellation, cross-market trading patterns and self-trading.

Key takeaway.

Algorithmic trading remains a key supervisory priority under REMIT. If you're using automated trading strategies, now is the time to review your monitoring and record-keeping – particularly with the Algorithm ID reporting requirement on the horizon.

The recast REMIT requirements and ACER are putting in place similar algo trading rules and guidance in the energy space to what has been in place under MiFID2 for a while now. Traders active across the whole energy value chain are likely to find ESMA’s Supervisory Briefing on Algorithmic Trading, published earlier this year, useful: it provides guidance on the definition of “algorithm” and “algo trading strategy”, emphasises testing, and offers early guidance on the interface between algorithmic trading regulation and the AI Act.

Turning over a new leaf: Commission proposes EU ETS overhaul

The European Commission has published its Electrification Action Plan and proposed amendments to the EU Emissions Trading System (EU ETS), as part of its broader push on competitiveness, decarbonisation and energy security.

Here's what's in the package:

• Electrification action plan: The Commission wants to accelerate smart electrification across industry, transport and buildings, tackling barriers through measures on electricity pricing, grid deployment, smart metering and financing for electrification projects.
• EU ETS review: The proposed reforms aim to modernise the ETS while preserving its climate-transition role and strengthening its contribution to industrial competitiveness, innovation and investment, by updating the Linear Reduction Factor (LRF) of 3.7% for 2031-2035 and 1.7% for 2036-2040, making the trajectory more gradual and aligned with domestic climate ambition level.
• Industrial decarbonisation funding: New measures to boost funding for industrial decarbonisation, including through the proposed Industrial Decarbonisation Bank, the ETS Investment Booster and existing ETS funding mechanisms.
• Free allocation and market stability: Free allocation would continue beyond 2030 to 2038 and become more closely linked to decarbonisation investment within the EU. The Commission also proposes reforms to the Market Stability Reserve and further measures affecting aviation, maritime transport and waste incineration.
• Extension to other sectors: The proposal would also capture waste incineration and strengthen requirements for aviation and shipping.

What's next?

The proposals now go to the European Parliament and Council under the ordinary legislative procedure. We'll be tracking developments and reporting back in future editions.

Autumn leaves (of extra paper): ESMA consults on TC-CCP annual reports

On 18 August 2026, ESMA launched a consultation on the content and format of annual reporting by clearing members and clients on activity at third-country CCPs (TC-CCPs recognised under Art. 25) under EMIR Art. 7d, publishing draft RTS and ITS.

European supervisors have previously told ESMA this additional reporting is superfluous, given that existing Art. 9 reporting already covers clearing at TC-CCPs. ESMA is pressing ahead regardless and is now seeking wider stakeholder feedback.

Who's in scope?

Indirect clients are outside the reporting obligations, but all clearing conducted by entities within a group is covered – even where some entities sit outside the EU regulatory perimeter.

What's covered?

The reporting obligation extends beyond derivatives to financial instruments and non-financial instruments, including SFTs, securities and non-financial instruments cleared through TC-CCPs – going well beyond current Art. 9 scope.

Timeline.

Comments are due by 12 October 2026, with a final report expected in Q4 2026. The draft RTS provides that the first submission covers every calendar year from 2025 onwards for which no report has previously been submitted.

For example, if the Regulation entered into force in May 2027, the first submission (due by the last business day of January 2028) would cover 2025, 2026 and 2027. If it entered into force in December 2027, the first submission (due by the last business day of January 2029) would cover 2025–2028.

The bottom line:

Clearing members and clients need to ensure data from 2025 onwards is available and preserved in sufficient granularity for the proposed reporting – don't wait for the final rules to start collecting.

Shedding the dead wood: FCA streamlines UK transaction reporting

On 3 August 2026, the FCA published PS26/15, streamlining the UK's transaction reporting system. Following HM Treasury's planned repeal of the existing UK MiFIR transaction reporting legislation in UK MiFIR Articles 25 to 27 and RTS 22, RTS 23 and RTS 24, the new rules (to be set out in MAR13 and MAR14) aim to cut duplicate and low-value data reporting, enhance data quality and reduce costs. The FCA estimates annual savings to business of approximately £115.3 million.

Here's what's changing:

• Fewer fields: The FCA is cutting MiFIR reportable fields from 65 to 52, simplifying requirements and aiming to improve data quality.
• Shorter back-reporting period: The default back-reporting period has dropped from five years to three, effective 3 August 2026 — although firms must still retain transaction and order records for five years under existing record-keeping rules.
• Lighter venue requirements: Narrowing transaction reporting to UK venue-traded instruments removes approximately 7 million financial instruments that are only tradeable on EU venues from scope.
• FX derivatives out: FX derivatives are removed from scope, as the FCA considers UK EMIR data a more reliable basis for monitoring FX derivative markets.
• Corporate actions exempted: Most corporate event activity is now excluded from reporting obligations under amended MAR 14.2 apply to all corporate event activity except for IPOs, secondary public offerings, placings and debt issuance.
• Lighter venue reporting: Trading venues are now required to populate fewer fields in their transaction reports, simplifying information provided by over 2,200 international firms.
• Conditional Single-Sided Reporting (CSSR): Despite industry scepticism, the FCA is pressing ahead with a new CSSR framework. The model will remain optional – it will be up to transaction reporting firms to decide whether they want to be a receiving firm.

Transition period.

From 3 August 2026, the FCA will take a flexible supervisory approach until the new regime formally comes into force on 3 April 2028. This is intended to let firms benefit from certain reforms ahead of the implementation date.

For details on the FCA's expectations during the transition, see Chapter 6 of PS26/15. Firms will want to use the implementation period to evaluate the operational impact and update transaction reporting frameworks.

The FCA has also indicated it will publish updated guidance for consultation in October 2026, so it’s worth keeping an eye out for that for further detail.

The bottom line for firms: now is a good time to review your transaction reporting framework, processes and procedures with a view to benefitting from savings.

Season of transparency: FCA consults on new equity market measures

On 31 July 2026, the FCA published CP26/30, "Supporting equity market transparency and considering market structure developments". It builds on last year's CP25/20 – where the FCA first flagged concerns about the growth of bilateral trading and the declining share of activity on central limit order books (CLOBs) — and lands alongside the FCA's consultation on finalising the UK equity consolidated tape (covered in the article below).

The good news for the market: the FCA's overall verdict is that UK equity markets remain liquid, resilient and efficient – so it's not proposing to mandate a shift back towards CLOBs.

Instead, the CP proposes a set of targeted tweaks: streamlining post-trade reporting by extending exemptions for non-price forming trades and scrapping the TNCP flag, giving trading venues more flexibility to run midpoint dark orders within lit order books, requiring SIs to publish more meaningful two-way quotes, and introducing new guidance requiring trading venues to publish an "outage playbook" for market disruptions.

What's next?

The FCA sees no current need for more drastic intervention, but is asking for views on what tools might be available if that changes. Responses are due by 16 October 2026, with a Policy Statement expected in H1 2027. SIs and trading venues in particular should start thinking about what these changes could mean for their transparency and reporting arrangements.

Tape measures: FCA finalises the UK equity consolidated tape

On 31 July 2026, the FCA published CP26/31, finalising its framework for a UK equity consolidated tape (CT) and opening new consultation and call-for-input chapters on the finer details. The tape will consolidate post-trade data alongside attributed pre-trade best bid and offer (BBO) from lit venues, with a single provider appointed via competitive procurement for an initial five-year term. Go-live is expected in 2027 or early 2028.

Key decisions and proposals include:

• Pre-trade BBO confirmed. The CT will display the market-wide best bid and offer price from CLOBs and periodic auctions, attributed to venues, for the first contract period. Greater depth of pre-trade data was rejected for now on delivery-risk grounds.
• Income sharing required. Departing from the consultation position, the FCA will require the CTP to share a portion of its income with data contributors. A separate consultation on the distribution methodology is planned for autumn 2026.
• Tiered latency. CLOBs and periodic auctions must send data within 50ms; APAs within 100ms; RFQ and voice systems within 1 minute. The CTP’s own 100ms processing target and 99.99% confidence interval will be set contractually rather than in rules.
• SI quotes consultation. The FCA proposes requiring the CTP to publish attributed SI quotes, displayed separately from venue data, with SIs sending quotes via existing publication arrangements. This links to parallel reforms in CP26/30.

The equity CT is now moving from design to delivery. Trading venues and APAs should assess their readiness for the new data-contribution and latency requirements. SIs should review the Chapter 10 proposals on including their quotes in the CT and respond by 16 October 2026.

As always, if any of the above raises questions or you'd like to discuss how these developments affect your business, we'd love to hear from you.