FCA publishes issue 69 of Market Watch

On 17 May 2022, the FCA published Market Watch 69, its newsletter on market conduct and transaction reporting issues.

The newsletter focuses on firms’ arrangements for market abuse surveillance, drawing on the FCA’s observations from engaging with small and medium-sized firms. It covers matters including:

  • Market abuse risk assessments. The FCA notes that where firms do not consider different types of market abuse, the different areas of business in which they operate, how that business is undertaken, and the different asset classes and instruments traded, they may not be able to adequately identify market abuse risks and align their monitoring programme to them to ensure effective surveillance.
  • Order and trade surveillance. The FCA’s interactions with firms indicate that surveillance arrangements are improving across industry. However, there continues to be variance with instances of little or no monitoring taking place.
  • Policies and procedures. The FCA has seen a variety of approaches where firms have created policies and procedures in relation to monitoring for market abuse.
  • Outsourcing. The FCA found that in some cases, there is a limited understanding or oversight of the surveillance taking place and reminds firms that the responsibility for identifying and reporting potential instances of market abuse to the FCA rests with the UK entity.
  • Front office. Among other things, to ensure staff act appropriately, firms should consider whether their market abuse training is effective and tailored to the risks associated with the desk, asset classes traded, client types and other relevant factors.

The newsletter also covers countering the risk of market abuse-related financial crime and investigations into potential market abuse by firms’ employees.


FIN. Team