Trading volumes in London are up to three times higher in value than previously estimated, according to analysis by the Financial Conduct Authority (FCA). The City regulator believes this is due to the inclusion of "dark trading," which involves private deals conducted through non-official channels like banks and other financial forums, utilising prices set on the London Stock Exchange.
This new assessment suggests there is more liquidity, or cash flow, in markets than previously understood, as data from official exchanges had been underestimating the true value of trading. The research aims to alleviate concerns regarding the City's capital market challenges and potentially deter companies from relocating to New York in pursuit of better investment opportunities.
The FCA intends to enhance transparency in share trading by 2028 through its "consolidated tape" plans. However, the London Stock Exchange Group has claimed that these plans could potentially give an advantage to some investors who avoid providing data.