The Data Reporting Services Regulations 2024

Made: 29th January 2024

Coming into force in accordance with regulation 1

A draft of these Regulations was laid before Parliament and approved by a resolution of each House of Parliament in accordance with sections 4(9), 83(3) and 84(3) of that Act.

PART 1 — Introductory Provisions

Citation, commencement and extent

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• (1) These Regulations may be cited as the Data Reporting Services Regulations 2024.

• (2) These Regulations come into force on the day on which the revocation of the Data Reporting Services Regulations 2017[^f00002] by section 1(1) of, and Schedule 1 to, the Financial Services and Markets Act 2023 comes into force.

• (3) These Regulations extend to England and Wales, Scotland and Northern Ireland.

Interpretation

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• (1) In these Regulations—

• “the 2017 Regulations” means the Data Reporting Services Regulations 2017;

• “APA” means a person authorised under regulation 9 to provide the service of publishing trade reports on behalf of investment firms pursuant to , or pursuant to rules made by virtue of, Article 20 or 21 of the markets in financial instruments regulation;

• “ARM” means a person authorised under regulation 9 to provide the service of reporting details to the FCA of transactions for financial instruments listed in Article 26(2) of the markets in financial instruments regulation on behalf of investment firms;

• “authorised person” has the meaning given in section 31(2) of FSMA 2000[^f00003];

• “credit institution” has the meaning given in Article 2(1)(19) of the markets in financial instruments regulation;

• “CTP” means a person authorised under regulation 9 to provide the service of collecting trade reports for financial instruments listed in , or listed in rules made by virtue of, Article 6, 7, 10, 12, 13, 20 or 21 of the markets in financial instruments regulation from, as applicable, UK regulated markets, UK multilateral trading facilities, UK organised trading facilities and APAs and consolidating them into a continuous electronic live data stream providing price and volume data per financial instrument;

• “CTP service” means a service described in the definition of a CTP;

• “data reporting service” means—the service of publishing trade reports on behalf of investment firms pursuant to , or pursuant to rules made by virtue of, Article 20 or 21 of the markets in financial instruments regulation;the service of reporting details to the FCA of transactions for financial instruments listed in Article 26(2) of the markets in financial instruments regulation on behalf of investment firms; ora CTP service;

• “data reporting service provider” means an APA, an ARM or a CTP;

• “data reporting service rules” means any rules made by the FCA under section 300H of FSMA 2000[^f00004] in relation to providing a data reporting service, as those rules have effect from time to time;

• “direction to tender” has the meaning given in regulation 6(1);

• “established in the United Kingdom” means constituted under the law of a part of the United Kingdom with a head office, and if there is a registered office, that office, in the United Kingdom;

• “financial instrument” means an instrument specified in Part 1 of Schedule 2 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001[^f00005];

• “investment firm” has the meaning given in Article 2(1A) of the markets in financial instruments regulation;

• “management body” in relation to a relevant person means—the board of directors, or if there is no such board, the equivalent body responsible for the management of the relevant person; andany person who effectively directs the business of the relevant person;

• “the markets in financial instruments directive” means Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments (recast)[^f00006];

• “the markets in financial instruments regulation” means Regulation (EU) No 600/2014 of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments[^f00007];

• “UK multilateral trading facility” has the meaning given in Article 2(1)(14A) of the markets in financial instruments regulation;

• “UK organised trading facility” has the meaning given in Article 2(1)(15A) of the markets in financial instruments regulation;

• “overseas clearing house” and “overseas investment exchange” have the meanings given in section 313(1) of FSMA 2000[^f00008];

• “preferred bidder” has the meaning given in regulation 6(3)(b);

• “recognised body” has the meaning given in section 313(1) of FSMA 2000, but does not include—an overseas investment exchange, oran overseas clearing house;

• “recognised clearing house” has the meaning given in section 285(1)(b) of FSMA 2000[^f00009] but does not include an overseas clearing house;

• “recognised CSD” means a legal person established in the United Kingdom who is authorised by the Bank of England for the purposes of Article 16 of Regulation (EU) No 909/2014 of the European Parliament and of the Council of 23 July 2014 on improving securities settlement in the European Union and on central securities depositories[^f00010];

• “recognised investment exchange” has the meaning given in section 285(1)(a) of FSMA 2000, but does not include an overseas investment exchange;

• “recognition order” has the meaning given in section 313(1) of FSMA 2000;

• “register” means the register maintained by the FCA under regulation 4;

• “UK regulated market” has the meaning given in Article 2(1)(13A) of the markets in financial instruments regulation;

• “relevant person” means—a data reporting service provider,an authorised person who is not a data reporting service provider, ora recognised body which is not a data reporting service provider;

• “senior management” means natural persons who exercise executive functions within an investment firm, a market operator (as defined in Article 2(1)(10) of the markets in financial instruments regulation) or a data reporting service provider and who are responsible, and accountable to the management body, for the day-to-day management of the entity, including for the implementation of the policies concerning the distribution of services and products to clients by the firm and its personnel;

• “tender contract” has the meaning given in regulation 6(3)(a);

• “the Tribunal” means the Upper Tribunal.

• (2) In this regulation, a “person authorised under regulation 9” includes a person whose compliance with these Regulations has been verified by the FCA under regulation 7.

• (3) In these Regulations, a reference to an Article of the markets in financial instruments regulations includes a reference to any assimilated law made under that Article.

• (4) In Part 3, any reference to a requirement imposed by or under these Regulations includes a reference to a requirement imposed on a person to whom these Regulations apply under—

• (a) any assimilated law made under the markets in financial instruments directive or the markets in financial instruments regulation;

• (b) the markets in financial instruments regulation; or

• (c) data reporting service rules.

PART 2 — Authorisation of Data Reporting Services

Prohibition on the provision of a data reporting service

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• (1) A person must not provide a data reporting service in the United Kingdom as a regular occupation or business unless the person is—

• (a) acting in accordance with an authorisation to provide that data reporting service granted under these Regulations;

• (b) an investment firm which is operating a UK multilateral trading facility or a UK organised trading facility where the FCA has verified under these Regulations that the firm complies with these Regulations in respect of the data reporting service concerned;

• (c) a credit institution which is operating a UK multilateral trading facility or a UK organised trading facility where the FCA has verified under these Regulations that the institution complies with these Regulations in respect of the data reporting service concerned; or

• (d) a recognised investment exchange operating a trading venue where the FCA has verified under these Regulations that the exchange complies with these Regulations in respect of the data reporting service concerned.

• (2) A person who breaches a prohibition imposed by paragraph (1) is to be taken to have contravened a requirement imposed on it under these Regulations.

• (3) In this regulation, “trading venue” has the meaning given in Article 2(1)(16) of the markets in financial instruments regulation.

Register of data reporting service providers

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• (1) The FCA must maintain a register of all persons—

• (a) it has authorised to provide a data reporting service under these Regulations, or

• (b) whose compliance with these Regulations it has verified in accordance with regulation 7.

• (2) The FCA must—

• (a) publish the register online; and

• (b) ensure that the register contains information on the services which persons on the register are authorised to provide including, where a tender contract to provide a CTP service is awarded, details of—

• (i) the service to which the tender contract applies, and

• (ii) the term of the tender contract and, where applicable, any extension to that term.

Application for authorisation to provide a data reporting service

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• (1) An application for authorisation to provide a data reporting service must be made to the FCA.

• (2) An application made under paragraph (1) must be—

• (a) made in such manner as the FCA may direct; and

• (b) contain, or be accompanied by, all the information required to demonstrate, in respect of the data reporting service the applicant wishes to provide, that the applicant meets the conditions for authorisation to provide a data reporting service under regulation 8.

• (3) At any time after receiving an application and before determining it the FCA may require the applicant to provide it with such further information as it reasonably considers necessary to enable it to determine the application.

• (4) The FCA may give different directions, and may impose different requirements, in relation to different applications or categories of application.

Direction to tender

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• (1) The FCA may give a direction that a tender is to take place in order to select a person to provide a CTP service (a “direction to tender”).

• (2) A direction to tender must specify—

• (a) the steps to be taken by prospective bidders wishing to participate in the tender, and

• (b) the nature of the CTP service to which the tender applies, by reference to the description of financial instrument for which trade reports are to be collected and, where applicable, the relevant class of assets within that financial instrument.

• (3) The FCA must make a determination as to whether—

• (a) a bidder is to be awarded a contract to provide the CTP service to which the tender applies (a “tender contract”), or

• (b) where a bidder is not authorised or verified to provide the CTP service concerned, the bidder is a person to whom the FCA proposes to award a tender contract subject to that person being authorised or verified (a “preferred bidder”).

• (4) The maximum term for which the tender contract may be awarded by the FCA following a direction to tender (“the initial tender term”) is a period of five years beginning on such day as the FCA may determine.

• (5) The initial tender term may be extended by a period of no more than two years where—

• (a) the FCA intends to give a direction to tender in respect of the CTP service concerned and—

• (i) significant changes to the arrangements for the selection of a person to provide the service, or to the obligations associated with the provision of the service, are anticipated by the FCA which would not otherwise be in effect before the commencement of the tender, or

• (ii) following consultation with prospective bidders, the FCA cannot identify any likely participants in the tender other than the incumbent to whom the tender contract was awarded; or

• (b) following a direction to tender, a preferred bidder is not authorised or verified to provide the CTP service concerned.

• (6) For the duration of the period during which a tender contract is in effect (including any period during which the tender contract is extended) no person other than a person who has been awarded a contract to provide the CTP service concerned may provide that service.

• (7) A person who breaches a prohibition imposed by paragraph (6) is to be taken to have contravened a requirement imposed on it under these Regulations.

• (8) In this regulation, reference to a person “authorised or verified” means a person who is authorised under regulation 9 to provide the CTP service to which the tender applies or a person whose compliance with these Regulations in connection with the provision of that service has been verified by the FCA under regulation 7.

Verification of compliance

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• (1) Regulations 5, 8 and 9(1) to (5) apply to an application to the FCA for verification of compliance with these Regulations, as those regulations apply to an application for authorisation to provide a data reporting service.

• (2) If the FCA verifies that an investment firm, credit institution or recognised investment exchange complies with these Regulations, it must give the applicant notice of its decision specifying—

• (a) the data reporting services to which the verification relates; and

• (b) any restrictions imposed under regulation 9(5) (as applied by this regulation).

• (3) The notice must state the date on which the verification takes effect.

• (4) The FCA must give the applicant a warning notice if it proposes to—

• (a) impose a restriction on the applicant; or

• (b) refuse an application.

• (5) The FCA must, having considered any representations made in response to the warning notice—

• (a) if it grants the verification without imposing restrictions, give the applicant notice of its decision complying with paragraphs (2) and (3);

• (b) if it grants the verification subject to the imposition of restrictions on the applicant, give the applicant a decision notice; or

• (c) if it refuses the application, give the applicant a decision notice.

• (6) The applicant may refer the matter to the Tribunal if the FCA—

• (a) grants the application subject to the imposition of restrictions on the applicant; or

• (b) refuses the application.

• (7) Regulations 10, 11(1) to (6) and 13 apply to a verification under paragraph (2) as they apply to an authorisation to provide a data reporting service.

Conditions for authorisation to provide a data reporting service

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• (1) The FCA may only grant an application for authorisation to provide a data reporting service if—

• (a) the applicant has complied with all the directions and requirements under regulation 5;

• (b) where a direction to tender applies in respect of the data reporting service concerned, the applicant is a preferred bidder;

• (c) the applicant—

• (i) is established in the United Kingdom, or

• (ii) is a person not established in the United Kingdom who—

• (aa) is applying to provide a service described in the definition of an APA or an ARM, and

• (bb) has a branch in the United Kingdom;

• (d) the FCA is satisfied that the applicant complies with all the requirements imposed by or under—

• (i) these Regulations,

• (ii) data reporting service rules,

• (iii) the markets in financial instruments regulation,

• (iv) the assimilated law made under the markets in financial instruments directive or the markets in financial instruments regulation; and

• (e) the FCA is satisfied that the persons who effectively direct the business of the applicant are of good repute.

• (2) In this regulation, “branch” means a place of business other than the head office or registered office which—

• (a) is part of the applicant,

• (b) has no legal personality, and

• (c) provides a data reporting service.

Determination of an application for authorisation to provide a data reporting service

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• (1) The FCA must determine an application for an authorisation to provide a data reporting service before the end of the period of six months beginning with the date on which it received the completed application.

• (2) The FCA may determine an incomplete application if it considers it is appropriate to do so.

• (3) An applicant may withdraw its application, by giving the FCA notice, at any time before the FCA determines it.

• (4) The FCA may grant authorisation to carry out the data reporting services to which the application relates or such of them as may be specified in the authorisation.

• (5) The FCA may grant authorisation subject to the imposition of such restrictions on the applicant as it considers appropriate.

• (6) If the FCA grants an application for authorisation, it must give the applicant notice of its decision specifying—

• (a) which data reporting services the applicant has been granted authorisation to provide; and

• (b) any restrictions imposed under paragraph (5).

• (7) The notice must state the date on which the authorisation takes effect.