Supporting equity market transparency and considering market structure developments

We appreciate the opportunity to respond to the Financial Conduct Authority's consultation paper CP26/30 on supporting equity market transparency and considering market structure developments. Our response is based on our experience as an active participant in UK markets.

NBIM is the investment management division of the Norwegian Central Bank ("Norges Bank") and is responsible for investing the Norwegian Government Pension Fund Global in a globally diversified manner. NBIM held assets valued at NOK 21 268 billion as of 31 December 2025, of which GBP 86 billion was in UK equities and bonds of UK issuers.

As a long-term investor NBIM has an interest in well-functioning financial markets that facilitate the efficient allocation of capital and promote long-term economic growth. This means that we engage in market structure developments that affect market liquidity, transparency and execution quality.

On market transparency and market structure

We agree with the FCA's assessment that UK equity markets remain liquid, resilient and efficient and the conclusion that the evidence presented does not justify steering trading towards specific execution mechanisms at this point. We agree that there is no evidence that would justify limiting investors' choices about where and how to trade, and that any such intervention should require a high evidential bar and a clear risk to market integrity.

For us it is important that competition between execution mechanisms is fair, and that mechanisms performing the same economic function are treated alike. Transparency should show where liquidity resides and at what price, and we believe the introduction of a consolidated tape will serve as a coordinating mechanism in a fragmented market. Innovation should be accommodated and judged on its merits, because new mechanisms emerge to meet genuine investor needs. Our advice to regulators in other jurisdictions has been on the same basis. 

We support correcting asymmetries through functional equivalence and not by restricting the mechanisms concerned. The reformulated reference price waiver, which lets venues integrate midpoint orders within transparent order books, is an example of innovation accommodated on its merits.

Spreads on UK central limit order books have widened on average, but spreads are one indicator among several and not a direct measure of trading cost, because execution draws on the full set of liquidity sources available.

As a large buy-side investor we judge market quality by the trading outcomes we achieve over time. Investors' implementation experience, and how it varies across participants and over time, is a quality indicator, but not one a regulator can observe in market data. We therefore support monitoring through a range of indicators combined with regular engagement with market participants, and would welcome the opportunity to contribute a buy-side perspective through the FCA's market intelligence channels.

We support the FCA's recalibration of systematic internaliser (SI) quoting. Requiring SIs to quote the size they are generally prepared to trade, rather than a fixed minimum, ties published quotes to actual trading interest, and pre-trade transparency at those sizes supports price formation. Standard market size (SMS) is a reasonable ceiling for the obligation. It is not a hard line in the market, but trades well above it are of a different nature, negotiated and risk-managed case by case rather than quoted. Price improvement should remain available, as proposed.

Our detailed response is set out in the appendix and covers the questions on which we have a distinct view. We thank you for considering our perspective and remain at your disposal should you wish to discuss these matters further.

Yours sincerely

Emil Framnes
Global Head of Equity Trading and Transition

Vegard Vik
Special Advisor