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The Global Regulatory Brief provides monthly insights on the latest risk and regulatory developments. This brief was written by Bloomberg’s Regulatory Affairs Specialists.
Trading and markets regulatory developments
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 to learn more:
- USA: CFTC explores 24/7 derivatives trading and clearing
- UK: FCA explores regulation of cryptoasset trading venues
- EU: Commission consults on integration of European capital markets
CFTC explores 24/7 derivatives trading and clearing
The Commodity Futures Trading Commission (CFTC) has issued a Request for Comment (RFC) exploring the implications of enabling continuous, 24/7 trading and clearing of derivatives.
In summary: The CFTC is soliciting public feedback on the potential implications of enabling continuous market activity for issues such as operational resilience, collateral access, market liquidity, and the implications of a default occurring outside of normal business hours.
Regulatory considerations – trading: As technological progress and market demand drive demand for trading services on a 24/7 basis, the CFTC is assessing whether designated contract markets (DCMs) or swap execution facilities (SEFs) will be able to fulfil their regulatory obligations under 24/7 trading conditions.
- Reliability: The CFTC are interested in understanding how DCMs and SEFs would ensure the reliability and integrity of trading systems without extended scheduled downtime for maintenance and upgrades.
- Outages: Continuous trading could heighten the risk of unplanned outages, complicate patch management, and require live change deployments and rollback mechanisms.
- Surveillance: The CFTC is also examining how DCMs and SEFs would maintain robust market surveillance for abusive trading practices, including front-running, wash trading, pre-arranged trading, and any other manipulative or disruptive trading practices.
Regulatory considerations – clearing: The CFTC has derivatives clearing organization (DCO) regulations that are relevant to the extension of trading hours to a 24/7 basis, such as the ability to collect additional margin on non-business days.
- The risks brought by clearing products that are traded on a 24/7 basis may create an elevated need for liquid resources.
- With market liquidity of trading overnight often being much lower than that during the core business day, this can generate rapid shifts in prices and portfolio values.
Looking ahead: The CFTC are accepting comments until May 21 and is looking for feedback on the risks, considerations, and suggestions for where additional guidance is required to implement 24/7 trading in a safe and orderly way.
FCA explores regulation of cryptoasset trading venues
The Financial Conduct Authority (FCA) has published a discussion paper seeking views on how to regulate cryptoasset trading venues and associated activities, in anticipation of future legislative changes that would bring such activities within the FCA’s remit.
In summary: The FCA is soliciting public feedback on how best to structure a regulatory regime for cryptoasset trading venues (also known as cryptoasset trading platforms or CATPs), addressing risks to consumer protection, market integrity, and financial stability. This forms part of the broader UK approach to creating a clear and consistent framework for cryptoasset regulation.
Regulatory considerations – trading: The FCA is exploring how to regulate trading on CATPs to ensure transparent, orderly, and fair markets. This includes:
- Order handling and execution: The FCA is considering rules to ensure that orders are handled fairly, that execution practices align with market integrity, and that trading venues avoid conflicts of interest.
- Transparency: Requirements for both pre-trade (order book) and post-trade transparency are under consideration to support fair pricing and market efficiency.
- Market abuse: The paper proposes applying similar market abuse monitoring standards as those used in traditional finance to detect and deter manipulation, insider trading, and wash trading.
- Access and disclosures: The FCA is reviewing requirements for platform access, disclosures to users, and standards for listing and delisting cryptoassets.
Regulatory considerations – custody and intermediaries: In addition to trading, the FCA is examining the role of custodians and intermediaries to ensure the safeguarding of client assets and transparent intermediation.
- Safeguarding: Clear rules are proposed to protect client assets from loss, misuse, or insolvency risk.
- Operational resilience: Custodians and intermediaries would be expected to demonstrate robust controls and risk management systems.
Regulatory considerations – lending, staking, and use of credit:
- Lending and staking: The FCA is seeking views on whether and how to regulate cryptoasset-based lending and staking products, with a focus on disclosure, risk management, and fair treatment of consumers.
- Credit purchases: The paper raises concerns about consumers borrowing to invest in high-risk cryptoassets and explores the possibility of limiting such practices to reduce consumer harm.
Regulatory considerations – DeFi: The FCA is also asking how decentralised finance (DeFi) protocols and activities should be treated, noting the difficulty of applying traditional regulatory approaches to decentralised platforms and anonymous developers.
Looking ahead: The FCA is accepting comments until 13 June 2025 and feedback will inform future consultations and eventual rulemaking.
EU Commission consults on integration of EU capital markets
The EU Commission launched a targeted consultation to gather feedback on capital markets integration across the EU.
The consultation follows the publication of the EU Savings and Investments Union (SIU) Communication on March 19th, which sets out upcoming key policy initiatives to advance the creation of an EU single capital market.
In detail: The EU Commission seeks stakeholders’ input on how to address existing barriers to the integration of financial markets infrastructure as well as funds and asset management operations, and on barriers specifically linked to supervision.
- The Commission is aiming to review current EU financial market infrastructure rules to facilitate integration and remove existing barriers to consolidation.
- The EU Commission is also looking whether to strengthen supervisory convergence and to transfer certain supervisory tasks for capital markets to the EU level.
Next steps: The consultation closes on 10 June 2025. The feedback will inform new legislation in these areas that the EU Commission plans to present in Q4 2025.
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