Market Structure, Transparency and Reporting

Market Structure

AFME promotes investors’ continued access to a diverse array of execution mechanisms, allowing them to choose the type most suitable for their specific investment needs. In this context, we emphasise the important role that systematic internalisers (SIs) play in European equity markets. SIs use their own capital and balance sheet to facilitate more efficient and better priced execution to their clients, and act as a “shock absorber” by limiting the price impact of client trading. 

SI trading comprised approximately 14% of addressable, price-forming trading activity in 2024, and should be considered as distinct and complementary to matching mechanisms provided by trading venues.

1. MiFIR / MiFID II reforms in the EU and the UK - Implementation Guide for firms operating in wholesale secondary markets
2. The vital role of systematic internalisers (SIs) in European equities markets 
   
3. AFME response to European Commission Consultation – Executive Summary
4. AFME response to the SI regime for bonds and derivatives including Discussion Paper on equity markets

Transaction Reporting

Transaction reporting requirements are subject to review in both the EU and the UK.

In the EU, as part of the EU Markets in Financial Instruments Directive (MiFIR/D II) Review, ESMA’s consultation paper proposed significant changes, including the introduction of a large number of new transaction reporting fields. These changes (if finalised as proposed) would trigger highly complex and burdensome implementation projects for reporting firms that submit MiFID transaction reports.

In June 2025, ESMA launched a call for evidence on a comprehensive approach for the simplification of financial transaction reporting, with the objective to identify how best to enhance efficiency and reduce the costs associated with supervisory reporting, while maintaining a strong level of transparency and ensuring effective oversight from the authorities.

In the UK, the FCA has published a discussion paper considering all aspects of the UK transaction reporting regime. While the direction of travel is less defined in the UK at this stage, the FCA discussion paper does not suggest an increase in reporting. An FCA consultation paper is expected later this year.

AFME’s position is that regulatory reporting is one of the biggest burdens on investment firms, and it is therefore one of the most important areas where work can be done to reduce this burden.

1. AFME’s consultation response to the FCA discussion paper on "Improving the UK transaction reporting regime”
2. AFME’s consultation response to the ESMA consultation paper on the review of RTS 22 and RTS 24 (January 2025)
3. Chapter 5 of our MiFID Implementation Guide 

Commodities

EU Commodity Derivatives Regulatory Framework

On 26 February 2025, the European Commission published a targeted consultation on the functioning of commodity derivatives and certain aspects of spot energy markets, partially in response to the Draghi report. 

Ahead of this, AFME coordinated a cross-industry letter to President von der Leyen opposing premature regulatory interventions, particularly the introduction of a permanent Market Correction Mechanism (MCM). The letter helped ensure the MCM was excluded from the EU’s Clean Industrial Deal and Affordable Energy Action Plan. 

AFME has since submitted a comprehensive consultation response and continues to engage with the Commission and Member States as the next phase of work unfolds. Our aim remains to preserve market functioning and resilience by ensuring any future reforms are evidence-based, proportionate, and tailored to the realities of physical and financial commodity markets.

1. Joint Association Letter on Gas Price Cap
2. AFME response to EC commodity derivatives markets consultation

 

UK Commodity Derivatives Regulatory Framework
Following consultation paper CP23/27, the Financial Conduct Authority (FCA) published PS25/1 in February 2025, setting out the revised UK framework for commodity derivatives regulation. Key changes cover position limits, exemptions from those limits, position management controls and the position reporting regime. 

AFME’s Commodities Committee has engaged extensively with the FCA throughout the process, sharing detailed feedback and supporting member participation in consultations and workshops. Many of our key recommendations have been reflected in the final rules. 

AFME is now assisting members implement the new framework, including facilitating discussions with trading venues to ensure consistent approaches.

1. AFME and ISDA Response to FCA CP 23/27 on commodity derivatives