The UK’s Financial Conduct Authority (FCA) has published a package of reforms that aim to improve confidence in the country’s equity markets after a long downturn in investor interest.

The financial regulator released the plans on Friday, which lay out a roadmap to consolidate market-wide data within 18 months. The FCA hopes that this will counter the “often-underappreciated” depth and liquidity of stock markets in the UK.

It intends to award a tender to create this combined record next year, which will bring together data from the London Stock Exchange (LSE) and other ventures such as the generally confidential dark pools.

Simon Walls, executive director of markets at the FCA, said: “UK equity markets have evolved through competition, innovation and the choices made by investors and companies. These continue to be great foundations for a liquid and resilient market. A downside of choice can be
complexity, but this needn't mean a lack of transparency.

“A consolidated tape will make it simpler and easier for investors to see the whole market picture. Today’s package settles the big design questions and sets the path to deliver the tape within the next 18 months.”

The move aims to tackle a long-standing frustration of the FCA, which said in its release that it believes that UK equity markets are functioning effectively but lack visibility. In an interview with the Financial Times on Friday, Walls said that “we have way more liquidity here than is often reported and that is just silly”.

The UK has faced difficulties convincing large companies to list on its exchanges in recent years, with high profile failures such as Wise’s move from the LSE to the US’s Nasdaq highlighting the scale of the problem. The regulator believes this plays underreporting plays a part.

It is one of several recent attempts to bring UK equity markets more desirable, including the trialling of overnight trading and a potential reduction in the complexity of Initial Public Offerings.

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