FCA to publish London share trading data to defend UK public markets
The City watchdog is planning to start collecting and publishing all available data on share-trading in an attempt to show that liquidity in UK public markets is not as bad as it is often thought.
The plans will act as a stopgap until the Financial Conduct Authority (FCA) issues its ‘consolidated tape’ of trading data next year, which will bring together data across a range of platforms.
“The truth is we have way more liquidity here than is often reported, and that is just silly,” Simon Walls, interim director of markets at the FCA told the Financial Times in an interview.
“We are talking to loads of parties at the moment about whether the FCA can, at a little bit of risk to ourselves, step in and just sort this out.”
Current estimates of liquidity are based on the London Stock Exchange’s central limit order book, but this excludes periodic trades at the LSE – where firms have to wait until the end of a scheduled auction period for the transaction to be completed – as well as trading on dark pools.
Dark pools are private trading venues that allow large trades to be completed without publicly displaying information before the trade is completed, helping to reduce the impact on the wider market.
FCA London ‘myth busting’
Between January and September last year, 270m transactions were recorded in the LSE’s data, but the FCA reckons the total number of trades could be four times as large.
Many firms have highlighted the UK’s supposed poor liquidity as a reason for swapping their listing. In 2024, for example, Flutter Entertainment said it would be able to access “the world’s deepest and most liquid capital markets” in New York, while Tui said less than a quarter of its share trading took place in London, compared to its other listing in Frankfurt.
“People in the market know this (the under-reporting) is a problem,” Walls said. “But it does dog us because sometimes when an issuer has historically chosen to move from the UK to the US, one of the thoughts is that liquidity is lower in the UK and often it’s not true.”
The FCA has been circulating a ‘myth-busting’ document over the past year which claims that real liquidity across FTSE indices is comparable to the S&P 500 and the Nasdaq 100.
The move is the latest step in the last few years to try and re-invigorate the UK’s public markets following a bruising few years. In 2024, about 88 companies either delisted entirely or transferred their primary listing from the UK.