The Managed Funds Association has asked the Financial Conduct Authority to keep execution choice unrestricted in UK equity markets, arguing that the evidence before the regulator does not justify steering order flow toward particular venues or execution methods. The request sits at the top of a comment letter the trade group filed on CP26/30, the FCA's consultation on equity market transparency and market structure, which closed with recommendations covering data pricing, trade reporting and closing-price integrity.

The stakes are straightforward for desks on both sides. Every item in the letter maps to a line in the execution budget or a step in the workflow: venue selection, market data licensing, algorithmic trading compliance, and the fallback procedures that govern what happens when a venue stops trading near the close.

What does the MFA actually propose?

The letter organises its case into four positions.

• Preserve execution choice. The MFA agrees with the FCA's own finding that current evidence does not justify restrictions that would push trading toward specific venues or execution methods. Competition among trading methods, the group argues, drives innovation, lowers costs and lets managers deliver better outcomes for investors.
• Reduce market data costs. The letter flags rising market data, connectivity and licensing fees as a barrier to liquidity access, particularly for smaller asset managers. It asks the FCA to explore tying market data fees more closely to production costs and to advance a comprehensive, reasonably priced equity consolidated tape that would give investors a market-wide view of trading activity.
• Remove unnecessary regulatory burdens. The MFA supports the FCA's proposals to simplify trade reporting and to eliminate requirements for algorithmic trading firms that it views as disproportionate. On one point the group draws a line: it opposes extending public reporting to equity swaps at this time, on the grounds that such reporting could duplicate existing transparency, expose sensitive trading information and raise costs for investors.
• Strengthen market resilience. The letter backs clear, pre-disclosed fallback arrangements for trading disruptions that preserve the integrity of the official closing price. That price, the MFA notes, underpins fund valuations, benchmarks and derivatives settlement relied on by institutional investors.

Where is the mandated line?

Nothing in the letter is binding. This is a comment response to a consultation, not a rule. The FCA proposed the underlying changes in CP26/30; the MFA's role here is to shape what the final rule text says and when compliance deadlines land. Desks tracking the file should separate three layers: what the FCA has proposed, what the MFA supports, and what the MFA wants changed or dropped.

On the first two, the alignment is explicit. The MFA endorses the FCA's own conclusion against venue-steering restrictions and backs the proposals to simplify trade reporting and trim algorithmic trading requirements. The additions the trade group brings to the table are cost-driven: market data fee reform tied to production costs, a consolidated tape priced for broad uptake, and a refusal to extend public reporting to equity swaps.

The swaps point carries the most execution-sensitive risk in the letter. Position reporting on swaps, if the FCA were to adopt it later, would expose hedging patterns that managers currently keep out of public view. The MFA frames this as both a duplication problem and a cost problem.

Why the closing price gets its own section

The resilience recommendation is the least visible and arguably the most concrete item for institutional workflow. When a venue suffers a disruption near the close, the question becomes which trades set the official closing price. Fund valuations, index benchmarks and derivatives settlement all reference that number. Pre-disclosed fallback arrangements would tell market participants in advance how the price forms when the primary mechanism fails, rather than leaving it to be settled after the fact.

For buy-side desks, that is a valuation risk question. For sell-side and infrastructure teams, it is a venue-configuration and contingency-planning question. The MFA's position is that the arrangements should be disclosed before disruption, not negotiated during it.

What is asserted versus what is measured

The letter rests on two evidentiary claims worth separating. The first — that current evidence does not justify restrictions steering trading to particular venues — the MFA attributes to the FCA's own analysis. The second — that market data costs limit liquidity access, particularly for smaller managers — is asserted by the trade group without figures attached in the summary released publicly. The full letter, which the MFA has published, carries the detail.

The consolidated tape proposal is the item with the longest implementation horizon. A comprehensive, reasonably priced tape would change how buy-side desks measure execution quality across venues and how retail-facing platforms display prices. The FCA has not committed to a timeline in this consultation phase.

"Global competition for investment and public listings is fierce," said Jillien Flores, MFA Chief Advocacy Officer. "Deep, liquid equity markets are essential to attracting capital and making the UK an inviting place for companies to go and stay public. Competitive trading options, affordable market data, reliable infrastructure, and streamlined regulation can help the UK compete for global capital and remain a leading financial centre."

That framing sets the political backdrop: the UK is competing for listings and order flow against other financial centres, and market structure choices are part of that contest.

What comes next

The FCA will now weigh comment letters against its CP26/30 proposals before publishing final rules, and the balance it strikes between the MFA's data-cost demands and the swaps-reporting question will determine how much of the buy-side wish list reaches the rulebook.