PS25/17: The SI regime for bonds and derivatives including Discussion Paper on equity markets

Read PS25/17[1]

Why we are changing

The new bond and derivatives transparency requirements set out in PS24/14 come into force in December 2025.

From 1 December 2025, the changes will remove the systematic internaliser (SI) regime for:

• bonds and derivatives
• structured finance products  
• emission allowances

From 30 March 2026, the changes:

1. Remove prohibitions to allow investment firms to:

• Engage in matched principal trading (MPT) on the multilateral trading facility (MTFs) it operates.
• Operate an organised trading facility (OTF) in the same legal entity for which they are a systematic internaliser.

2. Amend the reference price waiver conditions to allow trading venues operating under the waiver to source the reference price from a wider set of venue provided that the reference price is widely published and regarded by the market as reliable.

Changes to reference price waivers (RPW) mean that trading venue operators can use a broader set of prices when crossing orders for equities under the RPW.

The aim is to support competition, reduce unnecessary complexity and improve market resilience.

Who this is for

The changes are most relevant to:  

• systematic internalisers in all asset classes
• trading venues
• UK branches of overseas firms undertaking investment services and activities
• investment firms

The Policy Statement may also interest:

• Approved Publication Arrangements (APAs)
• law firms
• market data and analytics firms
• consultancies
• retail investors
• trade associations

Next steps

The removal of the SI regime comes into force on 1 December 2025.

The rules amending the RPW conditions and lifting the prohibitions on investment firms come into force on 30 March 2026.

We’ll update our Handbook accordingly.

Firms do not need to take any action.  

If you choose to make use of new opportunities under these changes, you should review the final rules and assess whether you need to make changes to your operations or compliance.

Read the legal and standards instruments annex (PDF)[1]

Equity markets

We’re still considering responses to the discussion paper on equity markets (chapter 4 of CP25/20).

We’ll publish a consultation on equity markets in the first half of 2026. 

Background

In CP25/20[2], we consulted on a package of reforms to the SI regime and related transparency rules.

These proposals followed changes introduced in:

• PS24/14[3] – which removed pre-trade transparency obligations for SIs in bonds and derivatives.
• PS23/4[4] – which removed SI status as a determinant when deciding which party to an OTC trade must make the details public.

The consultation also responded to feedback from the Wholesale Markets Review.

We also used CP25/20 to start a broader discussion on the structure and transparency of the UK equity market.