Wholesale markets topline outcomes and metrics

Metric WFV1-M01: Maintain the proportion of firms confident that the FCA’s oversight ensures relevant financial markets function well

Data source and description

This metric was sourced from the FCA and Practitioner Panel survey. Find out more about the FCA and Practitioner Panel survey[3] and where we have used the survey within our metrics.

How the metric was calculated

The metric was the proportion of Wholesale markets respondents that responded ‘very or fairly confident’ to Q3 ‘How confident are you that the FCA’s oversight of the industry delivers on the following statutory objectives?’ – ‘Ensuring relevant financial markets function well’.

The metric was based on responses from those firms categorised as being in the 2 sectors related to Wholesale markets. In 2021, these were 333 wholesale financial markets firms and 392 investment management firms. In 2023/24 there were 509 wholesale financial markets firms and 757 investment management firms. In 2024/25, among 1,109 firms responding, 613 were investment management firms and 495 were wholesale market firms.

We used data from 2021 as our baseline and compared the latest survey results (the 2024/25 survey) with the baseline year. Note that the previously published 2021 data was incorrect by 1 percentage point.

Interpretation of the metric values

This metric was an indicator of firms’ confidence in our delivery of the strategic objective to ensure relevant financial markets function well. The metric does not perfectly align with this outcome since it focuses on broader confidence in the FCA rather than market participants’ ability to make well informed assessments of value and risks due to transparency. This metric was a clear proxy measure.

With a baseline confidence rating of 94%, improvements to this outcome metric were challenging. Our expectation, for this metric, was for us to maintain the outcome at or near this level. We considered that maintaining the observed value for this metric over time was a positive indicator for our desired outcome that market participants are able to make well informed assessments of value and risks due to appropriate transparency.

Metric WFV1-M02: Reduction in the number of FCA market oversight actions for potential failure of listed companies to disclose properly

Data source and description

The data for this metric was extracted from our case management system.

This metric showed the number of enquiries initiated by the FCA’s Primary Market Oversight department (PMO) into possible failures by issuers to meet their market disclosure obligations. Issuers have legal and regulatory obligations to make fast and accurate public disclosures of the information that investors need to make well-informed investment decisions. These enquiries included such activities as contacting firms for information, desk-based analysis, sending letters of education and concern and referring to our Enforcement division. The metric also indicated market outcomes in that proper disclosure allows investors to make well-informed decisions.

PMO’s casework on disclosure is always grounded on a suspicion of possible failure and PMO does not reach judgments that issuers have failed, or breached rules. Unless issuers agree that they have breached, PMO (like the rest of the FCA) can only say that rules breaches have occurred (ie failure) after Enforcement investigation and decisions by the FCA’s Regulatory Decisions Committee. So PMO casework (actions) are about possible, rather than actual, failure.

How the metric was calculated

The value was the total number of enquiries opened by the Primary Market Oversight department into possible failures by issuers to meet their market disclosure obligations, as recorded on our case management systems.

Previous values

We used data from 2021 as our baseline and included the 2020 data below for comparison:

Interpretation of the metric values

All things being equal, we considered that a decrease in the observed value for this metric would be a positive indicator of our desired outcome that market participants are able to make well-informed assessments of value and risk due to appropriate transparency. However, the actual metric value will be influenced by other factors. These might include strategic and operational considerations within PMO which influence enquiry-opening decisions and may lead to an increase or decrease in enquiries (and a corresponding increase or decrease in the use of other tools to combat disclosure failure such as guidance and thematic work). These might also include improved processes at firms to identify and report appropriate declarations. Broader FCA developments may also have an impact, such as changes in reporting policies (broadening the range of cases captured in our systems) or approaches to data capture in our case management systems.

Metric WCO1-M01: Monitoring the number of firm failures

Data source and description

This metric was sourced from FCA data. We identified firms that have entered insolvency processes through our supervisory activities, and where we were notified by the firms themselves and/or the insolvency practitioners appointed. We refreshed the data for this metric monthly.

How the metric was calculated

The metric was the total number of FCA regulated firms that entered an insolvency process in the calendar year. This did not include firms that entered schemes of arrangement or company/partnership voluntary arrangements (compromises with creditors) or firms that entered members’ voluntary liquidation (a solvent process).

This metric aggregated the number of failed firms primarily operating in Wholesale markets.

Previous years

We used data from 2021 as our baseline and included the 2020 data below for comparison:

Interpretation of the metric values

This metric provided an indicator of the number of firm failures occurring in the wholesale financial services market. We regulate around 41,000 solo-regulated firms, for which we are the prudential regulator. In line with our statutory customer protection and market integrity objectives and our competition duty, the regulatory framework aims to mitigate harm while firms are a going concern, before any firm failure. The firms where we are the prudential regulator are not systemically important and should be able to fail, as orderly exits are part of a well-functioning market.

We expected this metric to be particularly affected by wider economic circumstances. For example, during difficult economic conditions, more firms are likely to fail. Firm failures are a normal part of business, but can harm consumers, the effectiveness of markets and overall confidence in the UK’s financial system. We wanted to ensure that firms had sufficient financial resilience to enable them to exit the market through a solvent wind-down and avoid failure. We also sought to mitigate harm in failure as far as possible where firms did enter an insolvency process. We minimised harm in a number of ways, for example by seeking to ensure that firms had proper measures to keep customer money safe.

Metric WCO2-M01: Maintain the proportion of firms confident that the FCA’s oversight protects and enhances the integrity of the UK financial system

Data source and description

This metric was sourced from the FCA and Practitioner Panel survey.

Find out more about the FCA and Practitioner Panel survey[3] and where we have used the survey within our metrics.

How the metric was calculated

The metric was the proportion of firms, identified in the Wholesale markets categories, that responded ‘very or fairly confident’ to Q3 ‘How confident are you that the FCA’s oversight of the industry delivers on the following statutory objectives?’ – ‘Protecting and enhancing the integrity of the UK financial system’.

The metric was based on responses from those firms categorised as being in the 2 sectors related to Wholesale markets. In 2021, there were 333 wholesale financial markets firms and 392 investment management firms. In 2023/24 there were 509 wholesale financial markets firms and 757 investment management firms. In 2024/25, among 1,109 firms responding, 613 were investment management firms and 495 were wholesale market firms.

We used data from 2021 as our baseline and compare the latest survey results (the 2024/25 survey) with the baseline year. Note that the previously published 2021 data was incorrect by 1 percentage point.

Interpretation of the metric values

This metric was an indicator of firms’ confidence in the FCA’s delivery of the strategic objective to protect market integrity, which is one important factor that will influence overall confidence in markets.

With a baseline confidence rating of nearly 9 out of 10, potential improvements to this outcome were challenging. Our expectation for this metric was for us to maintain the outcome at or near this level. We considered that maintaining the observed value for this metric over time would be a positive indicator for our desired outcome that markets are clean with low levels of market abuse, financial crime and regulatory misconduct.

Metric WCO2-M02: Increase in market cleanliness – decrease in the values of our market cleanliness statistics

Data source and description

This metric was sourced from FCA market cleanliness statistics that consisted of 3 separate measures. The underlying data were sourced from a combination of transaction data and prices from data vendors. We gathered and published market cleanliness statistics on abnormal price movements and trading activity that occurred before potential price sensitive announcements in UK equity markets. It was difficult and potentially misleading to draw meaningful conclusions from year-to-year changes, but we expected the measures to trend down over time, all things being equal.

How the metric was calculated

We analysed data to produce a suite of market cleanliness statistics on abnormal price movements or trading before potential market sensitive announcements in UK equity markets:

1. Market Cleanliness (MC) – proportion of corporate takeover announcements in each year for which we observed an abnormal movement in share prices before the announcement.
2. Abnormal Trading Volume (ATV) - percentage of unexpected price sensitive announcements in each year for which we observed abnormal increases in trading volumes ahead of potentially price sensitive announcements in equity instruments and some equity derivatives.
3. Potentially Anomalous Trading Ratio (PATR) - percentage of trading activity that is potentially anomalous ahead of a potentially price sensitive announcement in each year.

Note: these metrics cover UK equity markets only.

We took 2018, 2019, 2020 and 2021 data as our baselines.

Interpretation of the metric values

These metrics provided an indicator of potential market abuse in equity markets but had limits as measures of broader market cleanliness. They only covered UK equity markets and so were not a complete indicator of cleanliness and market confidence across all markets.

We monitored trends in the 3 measures to aid our understanding of market cleanliness. Interpreting the data was not straightforward due to factors unrelated to market abuse that can affect behaviour in markets. For example, price movements before takeover announcements that appear abnormal may simply reflect market conditions. Other factors can influence the market cleanliness statistic, such as financial analysts or the media correctly assessing likely takeover targets or significant legitimate trades that occur before an announcement.

Similarly, the existence of announcements where we have found statistically significant increases in volumes does not mean that market abuse occurred before each of those announcements, as volumes can fluctuate for a variety of reasons, but it is a potential indicator that market abuse may have occurred.

Finally, metrics were also focused on insider dealing and so do not allow any conclusions to be drawn on the levels of unlawful disclosure or market manipulation that may be taking place in the wholesale markets. Any attempts to extrapolate an indicative trend to financial crime and regulatory misconduct should also be discouraged.

All things being equal, we considered that a downward trend in the values observed for each of these metrics would be a positive indicator for our desired market cleanliness outcome but we did not expect any of these metrics to reach ‘zero’.

Links to further information

For further information on the measures and how they can be interpreted:

Market cleanliness statistics[7]

Abnormal Trading Volume Ratio[5]

Potentially Anomalous Trading Ratio[6]

Metric WCO2-M03: Increase in proportion of applications rejected, withdrawn or refused by the FCA under Money Laundering Regulations (MLRs) or for financial crime reasons

Data source and description

This metric was sourced from FCA authorisations data. We gathered data on the rate at which applications for regulatory approval by firms were refused, withdrawn and rejected (known as RWR). MLR registrations are currently reported to HM Treasury annually.

We have responsibility for supervising the anti-money laundering controls of businesses that offer certain services such as payments, leasing and types of commercial lending. Firms offering these services need to register with us as an Annex 1 financial institution[11].

We also included the RWR rate for cryptoasset applications under MLR as this area is a particular focus for the FCA.

How the metric was calculated

We analysed the reasons why applications for authorisation by firms are unsuccessful to produce the RWR. This metric covered the following:

• Rejections – submissions rejected due to extremely poor quality and the fee returned to the firm on the basis it does not amount to an ‘application’
• Withdrawals – where we influenced a firm not to continue with the application following our engagement and scrutiny of the application
• Refusals – where we recommended refusal of the application, and this is agreed by the relevant decision maker and a Decision Notice is issued

Interpretation of the metric values

This metric was an indicator of the strength of our Gateway in minimising financial crime within the regulatory perimeter. It showed whether we were authorising firms that have high standards for minimising financial crime at the outset and being assertive in rejecting those that don’t.

We considered that an increase in the observed value for this metric over time would be a positive indicator for our desired outcome that we are effectively minimising financial crime. This metric should be considered alongside the other financial crime confidence metrics because if, over time, financial crime falls we would not expect to have a continuing increase in the number of applications rejected, withdrawn or refused.

In addition, RWR may change for reasons not linked directly to our assertiveness. For example, our engagement with compliance consultants and the Association of Professional Compliance Consultants may improve application quality, leading to fewer unsuccessful applications.

Metric WAC1-M01: Reduction in the number of operational incidents

Data source and description

This metric was compiled from supervisory data that records notifications made to us by firms. Under principle 11, firms must deal with us in an open and cooperative way and disclose to us anything that we would expect notice of. This includes any matter which could affect the firm’s ability to provide adequate services to its customers[5] and which could result in serious detriment to a customer[19] of the firm.[6] The metric captured the total number of these notifications that relate to the a firm’s operational resilience.

How the metric was calculated

We calculated the metric by adding the number of operational incidents that are reported to us.

Consumer: We aggregated the number of operational incidents for firms that are aligned primarily to ‘consumer’ sectors. These are the Retail Banking, Retail Lending, General Insurance & Protection, Retail Investment and Consumer Finance portfolios of firm

Wholesale markets: We aggregated the number of operational incidents for firms that are aligned primarily to ‘wholesale markets’ sectors. These are the Wholesale Financial Markets and Investment Management portfolios of firms.

Previous years: We used data from 2021 as our baseline and included the 2020 data below for comparison:

The previously published data for 2023 has been amended to account for changes to the FCA supervisory model. However, these corrections have not impacted the underlying trends identified from the data or our assessment of previous outcome metrics.

Interpretation of the metric values

Ensuring the UK financial sector is operationally resilient is important for maintaining both market access and the confidence of consumers, firms, and others reliant on the smooth functioning of wholesale markets. Operational incidents can cause harm to market participants, pose a risk to market integrity, and could threaten the viability of individual firms or cause instability in the financial system.

Operational incidents (including technology and cyber) reported reflect a range of events from reduced service availability to confidential data loss. In aggregate, these incidents can have an impact on market access and/or the confidence of those who rely on the smooth functioning of wholesale markets.

For instance, operational incidents such as IT outages may reduce access and operational incidents that are publicly disclosed, due to a potential or observed impact on market functioning, overlap with other criteria such as transparency and price discovery, which drive overall market confidence.

With that said, we have done much over the last 3 years to strengthen our operational resilience regime. For example, we introduced a new set of operational resilience rules, consulted on a new framework to report incidents to us and engaged much more with industry, both domestically and internationally. Firms are more aware of our expectations to report operational disruptions to us, and we believe that this in part explains the general increase in the volume of incidents. However, we also consider that more incidents are being reported to us from a sector where there is an increasing reliance on third parties and interconnectedness, and at a time where firms also continue to face a high, and growing, level of cyber threats and operational resilience risks, against a complex geopolitical backdrop.

Links to further information

More on the relevant FCA rules that underpin this metric[7].