The head of the UK’s Financial Conduct Authority has estimated that equity investors could save almost £1bn over the next five years thanks to the EU’s flagship markets regulation.

The rules, introduced at the start of 2018, oblige asset managers to pay brokers separately for investment research and trading execution. This has led to a dramatic plunge in the amount of cash funnelled from investors’ pockets to the trading arms of large banks, according to Andrew Bailey, chief executive of the regulator.