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September 2007


Response to FSA Discussion Paper on trading in MTF shares: impact of proposed stamp duty changes

The Exchange has responded to FSA Discussion Paper DP07/3 on trading of MTF shares and the impact of proposed stamp duty changes. DP07/3 discusses how the markets in MTF shares might be regulated if HM Treasury takes forward its plans to extend stamp duty intermediary relief to trading in MTF shares that takes place away from the systems of an MTF (i.e. OTC). The Exchange recognises the FSA has undertaken important and positive work with respect to the regulatory structure between organised venues. DP07/3 also reflects the Treasury’s aim of facilitating further competition in the market for MTF shares, and we welcome this in what is already a highly-competitive environment.

However, the Exchange raises in its response a number of important issues that require careful consideration before the proposals are taken further. These include: the provision of appropriate trading transparency by firms that operate OTC but are not regulated by the FSA; information sharing between OTC participants and the lead MTF operator; and how trading in MTF shares that occurs outside the UK would be regulated. We suggest some steps that could be taken to help address these challenges.

Downloads
Response to FSA - Trading of MTF Shares (pdffile pdf - 83 KB)

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