FCA Policy Statement PS25/17: SI, Market Structure and Transparency Reforms

Overview

On 28 November 2025, the FCA finalised a package of reforms in PS25/17 to streamline UK wholesale market rules. The policy statement implements most proposals from CP25/20, notably removing the Systematic Internaliser (SI) regime for non‑equities, easing structural restrictions on trading venues, and refining equity transparency waivers. The final rules are largely permissive, with no new obligations unless firms choose to utilise the new options. Core changes took effect on 1 December 2025, with equity transparency technical standards moving on 30 March 2026.

What is changing

• Removal of SI regime for non‑equities. The SI framework is abolished for bonds, derivatives, structured finance products and emission allowances, reflecting the removal of pre‑trade SI transparency and the move to the Designated Reporter regime for post‑trade. The FCA is introducing a Glossary definition of “equity systematic internaliser” and will end‑date non‑equity SI entries on its register – firms need not actively deregister.
• Venue restrictions lifted. The prohibition on an SI operating an OTF in the same legal entity is removed. The ban on matched principal trading (MPT) by MTF operators is also removed, provided firms hold the appropriate principal dealing permission and comply with conduct and prudential standards.
• Reference price waiver (RPW) broadened. Trading venues may source the reference price from a wider set of venues, subject to reliability and wide publication. The FCA has deferred its proposal to permit RPW at the order level within lit order books pending work on post‑trade flags as part of a 2026 equity transparency consultation.

Timing and future work

• Handbook changes and commencement. Most Handbook amendments (including the equity SI definition and deletion of non‑equity SI mechanics) commenced on 1 December 2025. Equity pre‑trade transparency waivers are recast from 30 March 2026, with limited transitional relief through 30 June 2026.
• Future work. The FCA will consult in 2026 on equity market structure and transparency, including the deferred order‑level RPW proposal.

Practical impact on firms

• Strategic structuring. Firms can consolidate activities by operating SIs and OTFs within a single legal entity and by offering MPT on an MTF without separate affiliates, reducing operational complexity and costs.
• Permissions and compliance. Firms adopting the new flexibilities should update conflicts of interest frameworks, governance and disclosures, including segregation of systems/personnel where appropriate and clear client communications on principal activities alongside venue operation. MTF operators intending to offer MPT must ensure dealing‑as‑principal permissions, and revisit their prudential position in particular.
• Transparency operations. Venue operators relying on the broadened RPW should document reference price governance to evidence reliability and market‑wide representativeness, and update rulebooks to reflect the new rules.
• SI de-registration. No action is required to deregister non‑equity SI status, the FCA will end‑date register entries.