The regulator said this approach creates challenges, particularly for UK branches of EU investment firms.
A disorderly transition to a low carbon economy could destabilise the financial system.
The March market turmoil highlighted continuing vulnerabilities and the need for further reform.
BlackRock's Barbara Novick said the financial system remains vulnerable to another liquidity strain.
The deal is conditional upon regulatory clearance of LSEG’s proposed acquisition of Refinitiv.
OTC trading still accounts for the majority of activity.
The consultation closes on 11 January 2021.
The European Commission wants the industry to reduce exposures to UK market Infrastructures.
There are currently 499 liquid bonds subject to MiFID II transparency requirements.
