FCA finds London trading volumes higher than previously estimated

The Financial Conduct Authority believes actual trading values in London are significantly greater than official figures suggest, with dark trading accounting for a substantial portion of market activity. This phenomenon involves private transactions executed through banks and financial forums that utilise pricing data from the London Stock Exchange without appearing on public exchange records.

Analysis indicates these off-exchange dealings mean liquidity levels have been underestimated by regulators who previously relied solely on consolidated tape data. Executives at the LSE noted in May that direct trading proportions were lower than those of other major global markets, yet this new assessment suggests capital flows remain robust despite earlier concerns about market struggles.

The regulator aims to enhance transparency regarding share transactions before 2028, though plans under a consolidated tape framework have drawn criticism from the London Stock Exchange Group for potentially favouring investors who withhold data. These efforts seek to counteract fears that companies might relocate operations to New York in pursuit of superior investment opportunities.

Recent figures highlight renewed confidence among potential acquirers targeting UK-listed firms. Between March and June, more domestic companies received public bids offering premiums exceeding twenty per cent above share price than any other major group globally. A total value of forty-four billion pounds was involved in so-called bear hugs where overseas buyers pursued groups including Segro, Beazley, easyJet and others.

Political pressure mounted on Chancellor John Healey to prioritise financial services following announcements regarding stamp duty relief for newly listed entities. The government faces scrutiny over whether boosting market momentum remains a priority amidst broader economic challenges affecting confidence in London-based capital markets.