2017年-FCA英国金融行为监管局_conflicts_of_interest_in_dark_pools_tr16_5_3页_116kb

Regulator Assessment Summary: Conflicts of Interest in Dark Pools (TR 16/5)

Core Content

The FCA conducted a thematic review titled Conflicts of Interest in Dark Pools (TR 16/5) in March 2016, with the commencement date set for July 2016. The review aimed to assess how dark pools in the UK were promoted to clients and how conflicts of interest, both internal and external, were managed. The focus was on understanding current practices and ensuring compliance with existing regulatory requirements.

The assessment was conducted through information requests and on-site visits to firms operating dark pools. Based on the findings, the FCA provided feedback to firms in the form of letters and a general report, highlighting areas of good and poor practice across the industry.

Main Views and Key Information

• Adherence to Rules: The FCA found that firms generally adhered well to the rules regarding promotion, disclosure, and best execution. No serious breaches requiring significant regulatory action were identified.
• Purpose of Review: The review was not intended to introduce new rules or additional guidance but to:
  • Provide a status update on firms’ implementation of existing rules.
  • Encourage firms to periodically review their business practices in light of market developments and evolving strategies.
  • Offer comparative feedback to firms on their performance relative to peers.
• Scope of Impact:
  • Number of Affected Firms: Fewer than 20 investment banks and stand-alone Multilateral Trading Facilities (MTFs) operate dark pools in the UK.
  • Expected Changes: The number of dark pools is expected to decrease due to the phasing out of Broker Crossing Networks (BCN) pools under MiFID II.
• Costs and Benefits:
  • Costs:
    • The review is not expected to cause a significant incremental increase in business costs beyond annual review and change costs.
    • Estimated cost for 20 firms: £61,000 per firm (based on 90 man days at a weighted average cost of £680/day).
    • These costs are associated with familiarisation with the report, gap analysis of existing processes, and any necessary rectification.
  • Benefits:
    • The review encourages firms to refine their processes, controls, and staff training.
    • It promotes continuous improvement and enhances the integrity of the UK market.
    • The effort aligns with firms’ existing periodic reviews of systems and controls, rather than being an additional burden.
• BIT Score Context:
  • The BIT score for this review is £0.5.
  • The FCA does not expect any significant direct investment across the industry or individual firms due to this review.
  • The impact is primarily driven by MiFID II and the Market Abuse Regime (MAR) at the EU level, which are the major regulatory changes affecting dark pools.

Additional Notes

• Technology Investment: While the FCA did not expect significant technological changes as a result of this review, firms are already investing heavily in technology due to MiFID II.
• Feedback Mechanism: Feedback was provided to firms in a generalised manner, both publicly and privately, to allow for comparative insights without revealing sensitive information.
• Regulatory Review: The review was part of the FCA’s ongoing oversight of the market, not a new regulatory requirement. It reinforced existing obligations and provided guidance on best practices.

Conclusion

The FCA’s thematic review on dark pools was primarily aimed at assessing current compliance with existing rules and encouraging firms to maintain and improve their internal processes. The review did not introduce new regulatory requirements or significant additional costs, and its impact was minimal compared to the ongoing effects of MiFID II and MAR. The findings support the notion that the UK dark pool market is largely compliant and that firms are encouraged to align their practices with evolving industry standards and market conditions.