We’re seeking feedback on whether tailored market risk rules for non-bank trading firms could remove unnecessary barriers, free up capital and attract new market participants, ultimately supporting economic growth.
The rules in place today were originally designed for banks to ensure they held enough capital to absorb major trading losses and protect depositors.While that approach is sensible, it means non-bank trading firms face the same standards even though the potential harm from their failure is arguably lower.Rules designed for large global banks can place a significant burden on non-bank firms, potentially limiting their ability to provide liquidity.We want to ensure our framework remains fit-for-purpose and proportionate, while protecting market integrity and enabling sustainable growth.Our engagement paper explores different options for reform to boost market liquidity, foster innovation and strengthen the UK’s position as a leading financial hub.This is an open discussion to assess the practicality of different options, such as whether a more customised approach is needed and will inform our direction of travel for future proposals.This review delivers on our commitment outlined in our letter to the Prime Minister earlier this year. The window for feedback closes on 10 February 2026. Feedback will inform a more detailed consultation paper in 2026, followed by a policy statement, expected in 2027.We encourage all interested parties to engage with us and help shape the future of market risk regulation in the UK.We’ll continuously engage with industry throughout the engagement period, as well as host a roundtable at the end of January 2026. To register interest, email: MarketRiskReviewEP@fca.org.uk. You can also submit questions in advance for consideration.