April Global Regulatory Brief: Trading and markets

Regulatory authorities continue to advance initiatives to improve financial market structures. The following market structure policy developments represent a sample of wider regulatory and policy coverage available to Bloomberg Terminal customers. Run REGS <GO> to find out more or contact your Bloomberg representative:

• Kuwait: Kuwait exchange plans to launch bonds and sukuk trading platform
• Hong Kong: HKEX details proposed operational framework for T+1 settlement migration
• EU: Commission publishes final rules on order execution policies
• UK: FCA finalises changes to UK short selling regime

Kuwait – Boursa Kuwait exchange plans to launch bonds and sukuk trading platform

Boursa Kuwait has announced plans to introduce bonds and sukuk trading platform under a newly approved regulatory framework, allowing local and foreign companies to raise capital through listed debt instruments. The initiative is intended to support capital market diversification and broaden access to listed debt instruments.

Key elements of the new framework:

• Full lifecycle regulatory coverage (Resolution 38): Governs bonds and sukuk from listing and daily trading through to early redemption or maturity, including delisting procedures and treatment in market indices.
• Access for domestic and foreign issuers with clear entry thresholds: Open to Kuwaiti and international companies with a minimum issuance size of KD100,000 (~$322,860) and mandatory credit rating from a recognized agency.
• Investor protection and compliance requirements: Instruments must be freely tradable, issuers must appoint a representative body for bond/sukuk holders, and sukuk must comply with Sharia principles.
• Enhanced disclosure and ongoing obligations: Requires continuous disclosure of financial statements and material developments, plus rules governing negotiated trades and issuer responsibilities throughout the listing period.
• Dedicated trading infrastructure and rulebook update (Resolution No. 1 of 2026): Introduces a separate trading board for bonds and sukuk, with custom trading sessions and price limits distinct from equities, with dedicated operational arrangements.

Hong Kong – HKEX details proposed operational framework for T+1 settlement migration

HKEX has released a consultation paper outlining the necessary operational and technical modifications to shorten the Hong Kong cash market settlement cycle.

In more detail:
Following significant market support expressed in 2025, Hong Kong Exchanges and Clearing (HKEX) is formalizing the transition to a T+1 cycle to align with international best practices and mitigate systemic risk.

Key takeaways:

• Operational front-loading: The model requires post-trade activities to be significantly accelerated, moving clearing and settlement processing to the trade execution date (T) to ensure readiness for next-day finality.
• Service window extension: Recognizing the compressed timeframe, HKEX proposes to extend the service windows for settlement instruction (SI) input and matching, facilitating greater operational flexibility for global participants.
• Regulatory scope: The shortened cycle will encompass secondary market equities, exchange-traded products, debt securities, and physical settlements arising from stock options. IPOs and Northbound Stock Connect trades are currently excluded from this proposal.
• Institutional efficiency tools: HKEX is evaluating the development of bespoke operational tools to assist investment managers, custodians, and brokers in managing accelerated matching and settlement workflows.
• Ancillary market impacts: The exchange highlighted that a T+1 environment requires market participants to rigorously review their arrangements for foreign exchange, securities borrowing and lending (SBL), and intraday funding.

EU – Commission publishes final rules on order execution policies

The EU Commission adopted the final rules (Delegated Act) on the criteria for establishing and assessing investment firms’ order execution policies under the MiFID/R review.

Context:
ESMA published its final draft RTS for adoption by the EU Commission in April 2025, setting out the requirements for investment firms’ order execution policies under 1(4)(e) of the revised MiFID. These cover requirements on:

• Criteria for establishing order execution policies: including the categorisation of classes of financial instruments for the purposes of order execution policies and arrangements, and requirements for the selection of execution venues.
• Criteria for monitoring execution quality and arrangements: including the use of reference data to monitor execution quality, and new requirements for periodic re-assessment of order execution policies; in particular, also introducing the possibility to use Consolidated Tape data as reference data.
• Provisions for execution of client orders through dealing on own account and handling client instructions.

Next steps:
The text will undergo a three-month scrutiny period by the EU Council and EU Parliament before publication in the EU Official Journal and entry into force, with the provisions applying 18 months after entry into force.

UK – FCA finalises changes to UK short selling regime

The FCA has published PS26/5 finalising rules for the UK short selling regime under the Short Selling Regulations 2025. The changes maintain core market structure while modifying reporting, disclosure, and compliance requirements.

Context:
The reforms follow HM Treasury’s repeal-and-replace programme for retained EU law and the adoption of the Short Selling Regulations 2025, which created a new UK legislative framework and gave the FCA rulemaking powers for short selling activity. The FCA says the legislation keeps the core regime but changes it in several important respects, including requiring publication of anonymous aggregate net short positions and removing UK sovereign debt and related sovereign CDS from the main regime’s scope, while keeping them within emergency powers.

Key takeaways:

• New FCA sourcebook: The final rules replace the assimilated EU short selling regime and related technical material with a new FCA Handbook sourcebook for short selling, to sit alongside SSR 2025.
• Broadly unchanged after consultation: The FCA received 24 responses and says feedback was broadly supportive, so it is implementing most proposals largely as consulted on.
• Simplified market maker exemption: The FCA has made a notable change after consultation by removing the requirement for market makers to notify each individual financial instrument. Instead, market makers will submit a single activity-based notification, supported by possible FCA information requests and an annual attestation. The FCA says this should materially reduce friction and administrative burden.
• Aggregate disclosure model: Under SSR 2025, the FCA will publish anonymous aggregate net short positions in companies, based on the individual notifications it receives.
• Issued share capital concerns noted: Respondents raised difficulties obtaining reliable issued share capital data for net short position calculations. The FCA says its guidance should help and that it will consider whether future DTR changes could support disclosure of issued share capital for short selling purposes.
• Operational approach at launch: Because of the revised market maker notification model, the FCA will continue to receive notifications by email from the start of the new regime rather than introducing automation immediately.

Next Steps:

The regime will now start three months after publication of the policy statement, rather than the two months originally proposed.

Implementation will occur in two phases:

• Phase 1 on Monday 13 July 2026, covering the new short selling rules, final Statement of Policy, systems changes for disclosure of new anonymous aggregate net short positions, and the reportable shares list
• Phase 2 on Monday 30 November 2026, covering a bulk submission update for position reporting.