FIX Trading Community Tells FCA: UK Equity Data Must Show Real Liquidity

The FIX Trading Community has filed responses to two Financial Conduct Authority consultations — CP26/30 on UK equity market structure and CP26/31 on the equity consolidated tape — calling for data reforms that expose genuine liquidity rather than undifferentiated volume aggregates.

The association, which maintains the FIX Protocol (the messaging standard used across global trading), wants participants to measure liquidity by trading phase, execution mechanism and addressability. Its submissions argue that aggregate volume figures blur the distinction between liquidity a desk can actually interact with and flow it cannot.

Executive Director Jim Kaye framed the consultations as an opening to cut operational cost at the data layer. "The objective should be simple: market data that accurately reflects real liquidity, can be interpreted consistently and remains reliable when market conditions or trading models change," Kaye said. "The FCA's proposals provide a strong basis for progress. Our recommendations are intended to make the framework clearer, more resilient and easier to implement across a complex, interconnected market."

What does the response change for execution desks?

Nothing is mandated yet. The FIX papers are recommendations into an open FCA rulemaking process, not rules with compliance dates. But the specific asks map directly onto workflow and technology choices buy-side and sell-side desks will face if the FCA adopts them.

The seven recommendations are:

• Measure liquidity by trading phase, execution mechanism and addressability instead of undifferentiated aggregate volumes, with allowances for 'special' days such as index rebalances.
• Distinguish automated from manual off-venue executions through a clear trade flag.
• Remove or clearly identify technical and non-addressable trades, and align UK trade flags more closely with the EU where practical — including replacing the TNCP flag with the EU-aligned CONT flag for contingent trades.
• Use clear, standardised and machine-readable outage communications, supported by proportionate playbooks and closing-price fallback arrangements.
• Keep venue and systematic internaliser quote data separate in the consolidated tape.
• Set consolidated tape requirements around completeness, resilience and reliability, with operating arrangements that reflect actual market activity.
• Avoid bringing complex synthetic equity activity into public transparency without clear scope, dedicated identifiers and a full assessment of cross-regime impacts.

Each item carries an execution consequence. The addressability recommendation targets the gap between displayed volume and executable volume — a gap that distorts broker-routing decisions and transaction-cost analysis when technical trades inflate aggregates. The TNCP-to-CONT alignment would simplify cross-border reporting for firms operating in both UK and EU regimes. Machine-readable outage notices and closing-price fallbacks address the operational risk desks carry when a venue fails during the trading day.

The flag-separation ask on the consolidated tape responds to a structural feature of UK market structure: quotes from regulated venues and from systematic internalisers (dealer firms executing client flow internally, off-venue) currently risk being conflated in a single feed. FIX argues the two must remain distinct for the tape to be useful.

On synthetic activity, the association draws a line: transparency obligations should not extend to complex synthetic equity positions without dedicated identifiers and a cross-regime impact assessment. That positions FIX against an expansive reading of the FCA's transparency scope.

What is measured versus asserted

The submissions rest on one asserted principle rather than published statistics: that current aggregate volume data misrepresents addressable liquidity. The recommendation to carve out 'special' days such as index rebalances acknowledges a known distortion — rebalance-day volume spikes that desks do not treat as repeatable liquidity.

"Good regulation depends on good data," Kaye said. "By making liquidity easier to understand and operational processes easier to automate, the UK can support transparency and resilience without adding unnecessary complexity for firms or data users."

The full responses are published at fixtrading.org under the CP26/30 and CP26/31 consultation packages. The FCA's next step — a policy statement or further consultation with effective dates and compliance deadlines — will determine which of the seven recommendations become obligations for UK equity market participants.