The Financial Conduct Authority (FCA) is investigating a possible competition issue. It involves the London Stock Exchange Group (LSEG) and the landlord of the LSE data centre building. The issue is about the provision of low latency connectivity services (LLCS) between certain trading venues. The FCA’s goal is to ensure equal access to the data centre’s rooftop, a place currently exclusive to LSEG.
LLCS is crucial in high-frequency trading where any lag can make or break a trade. Hence, exclusive rooftop access could offer LSEG a competitive edge, a situation that the FCA plans to examine closely.
By focusing on this issue, the FCA demonstrates its commitment to fair competition in financial markets. Its aim is to ensure equal opportunities for all market players, irrespective of their size or influence. This action is in line with the FCA’s wider objective of promoting competition for consumer benefit.
Invitation for Feedback on Proposed Changes
As a part of its investigation, the FCA is seeking views on its proposed remedies. The regulator encourages feedback from financial market stakeholders and others who might be impacted by the current setup. This call offers market participants a chance to express their views and potentially influence the FCA’s inquiry results.
The FCA is particularly interested in understanding the potential effects of any changes to the access arrangements. The aim is to gauge how these changes might impact the competition dynamics in the LLCS market.
It is important to note that the FCA’s involvement in this issue is part of its wider mandate to ensure fair and transparent operation of the UK’s financial markets. The regulator consistently tackles potential competition issues head-on, and this case is no different.
In summary, the FCA’s actions aim to bolster the UK’s standing as a globally competitive financial market. By ensuring fair access to key infrastructure like the LSE data centre’s rooftop, the FCA is working to maintain the integrity and competitiveness of the UK’s markets.
