The UK Financial Conduct Authority (FCA) has made an official announcement regarding its intention to orchestrate a trading platform market study. This study will include both platforms and brokerages, as the British regulator sets out to discover which trading environment offers traders the best conditions.
According to the FCA, trading platforms connect retail traders to the global market, allowing them access both to assets and investment management. The platform market has been growing during the past eight years, followed by Assets Under Administration (AUA) growing from £108 billion back in 2008 to £500 billion in 2016.
Market Study Goals
These platforms provide clients and advisors with data and tools in order to make more informed investments. The FCA set itself the goal of examining the effectiveness of this medium in assisting traders to execute trades, and whether they provide value for money. In addition, the FCA intends to assess the competition between different platforms and brokerages, as well as seeing who can offer the clients a better deal.
The British regulatory authority will further take note of how certain criteria enhance traders’ experiences. The criteria include the available trading products, data regarding them, inter-platform interaction, asset managers, financial advisors, and fund rating providers.
This study follows on the heels of the Asset Management Market final report, that came out last month and brought to stage front several possible competition issues among platforms.
Christopher Woolard, Executive Director of Strategy and Competition at the FCA, commented that the FCA’s interest in conducting this study is to determine whether the existence of competition between platforms is in the best interests of clients: “Platforms have the potential to generate significant benefits for consumers and we want to ensure consumers are receiving these benefits in practice.”
The FCA has requested that feedback be submitted by September 8, 2017, and announced that the release of the interim report has been scheduled for the summer of 2018.