EU Commission adopts technical rules under Reviewed MiFIR-D
The European Commission has adopted the final technical rules implementing the MiFIR Review on a number of key areas, including market data and the transparency regime for bonds and equity. The rules, which should be published in the Official Journal and enter into force by the end of the year, will pave the way for the launch of the consolidated tapes in 2026.
In detail: The European Commission has adopted the final technical rules on:
- the obligation to make market data available to the public on a reasonable commercial basis,
- input and output data of consolidated tapes, the synchronisation of business clocks and the revenue redistribution by the consolidated tape provider for shares and ETFs,
- organisational requirements for APAs, ARMs and CTPs,
- equity transparency (RTS 1), and
- transparency regime for bonds, structured finance products and emission allowances (RTS 2).
Next steps: The rules will be subject now to a 3-month objection period (extendable by another 3 months) before their publication in the Official Journal of EU around September/October (TBC).
- Following that, the rules will enter into force in Q4 2025.
- The specific application date for each set of rules is set directly in the text.
FCA supports move toward faster fund settlement
The UK Financial Conduct Authority (FCA) has welcomed an industry-led statement of intent to accelerate the settlement of fund transactions in the UK, aligning with broader global efforts to shorten settlement cycles.
In more detail: While the settlement period for transactions in listed stocks and bonds in the UK, Switzerland and EU is set to change to T+1 from 11 October 2027, deals in units of UK funds typically settle on T+3 or T+4 in some cases.
- The FCA states that investors in UK finds should share in the benefits of faster settlement even if the operational practicalities of fund settlement will not allow all fund managers to offer T+1 settlement for units in funds.
- The FCA believe that moving trades in fund units to T+2 settlement would support investor protection goals.
Looking ahead: The FCA urges funds that currently operate on T+4 settlement to carefully consider how an extended gap between market settlement and fund unit settlement with impact investors.
- The FCA state that fund managers and their agents should in future need strong justification for cases where, exceptionally, more than 2 business days are required to settle trades in units of these funds.
- The FCA state that fund managers should determine what’s required to move to a T+2 settlement cycle in October 2027 and plan early to deliver this transition.
FINRA and MSRB move to rescind one-minute trade reporting rule
The Financial Industry Regulatory Authority (FINRA) and the Municipal Securities Rulemaking Board (MSRB) have filed amendments with the Securities and Exchange Commission (SEC) to rescind previously approved changes that would have required dealers to report most bond and municipal securities trades within one minute.
FINRA Rule 6730: In September 2024, the SEC approved amendments to FINRA Rule 6730, reducing the Trade Reporting and Compliance Engine (TRACE) reporting timeframe from 15 minutes to one minute, with exceptions for manual trades and firms with de minimis activity.
- However, industry feedback highlighted significant concerns, particularly from smaller firms, about the operational challenges and costs associated with implementing the one-minute reporting requirement.
- Firms noted that manual trade processes could not feasibly meet the accelerated timeframe, potentially leading to increased reporting errors and compliance burdens.
In sum: The MSRB formally filed amendments to rescind the one-minute reporting requirement, opting to retain the existing 15-minute standard.
Looking ahead: After not setting effective dates, FINRA and MSRB have now filed amendments with the SEC to rescind the changes that were previously approved by them. The files will be open for public comment and are expected to be approved by the SEC.
Nigeria to transition to T+2 equity settlement cycle
The Nigerian Securities and Exchange Commission will transition the equities market to a T+2 settlement cycle from November 28, 2025. This change is intended to improve market liquidity, reduce counterparty risk, and align Nigeria with global settlement standards—enhancing its attractiveness to both domestic and international investors.
Key implementation guidelines: The SEC has outlined key implementation requirements
- Obligation of Market Participants: All market participants, including brokers, dealers, broker/dealers and custodians, are required to update their systems and processes to ensure the effective implementation of the new settlement cycle.
- Investor Guidance: Investors are advised to consult with their brokers and investment advisers to understand how the new settlement cycle may impact their transactions and investment strategies.
