FCA Seeks to Reveal Dark Fund Data to Correct Misinformation About Liquidity

The United Kingdom’s Financial Conduct Authority (FCA) plans to implement an ambitious initiative to bring transparency to the UK stock market. The initiative involves collecting and disclosing comprehensive information on trades executed through dark pools and other trading venues where London-listed stocks are traded. This measure responds to regulators’ concerns over a serious issue of liquidity underreporting that has distorted market perception.

The Issue of Underreported Liquidity in London

For years, the actual liquidity of the UK stock market has been significantly higher than what conventional reports indicate. This gap between reported data and the market’s reality has created a false negative perception of the UK as a listing destination. According to reports from the Financial Times and Jin10, sizable companies have begun considering relocating their listings to U.S. markets in search of greater visibility and investor confidence.

Transparency Plan: Publishing Complete Dark Pool Data

The FCA has decided to adopt an unconventional but necessary approach: aggregating all trading data from regulated exchanges and dark pools to publish it in an integrated manner. This aims to reveal the true extent of liquidity available in the UK market. Simon Walls, interim head of markets at the FCA, clearly stated the regulator’s position, noting that “liquidity in the UK market is significantly higher than typically reported, and this inaccurate representation is unacceptable.”

Impact on Companies and the Regulator’s Outlook

This transparency initiative seeks to restore confidence in UK markets and demonstrate that London’s liquidity is competitive with other global financial centers. Publishing comprehensive dark pool data will enable investors and analysts to gain a full view of the market, eliminating the misleading information that has persisted. Through this measure, the FCA hopes to reduce the outflow of corporate listings and reposition London as a preferred destination for international stock trading.