The latest edition of Market Watch updates FCA’s views on market soundings, following on from previous editions. FCA says it has recently found cases where recipients of soundings have traded between receiving the initial communication but before the inside information has been disclosed, because the recipients have been able to identify the relevant details. FCA is concerned that recipients may have information that might enable them to identify the financial instruments referred to before they consent to receiving and protecting the inside information, which could give them an unfair advantage. FCA says that recipients in this position should assess whether they possess inside information before trading – and reminds them that both the CJA and UK MAR will apply to them.
FCA says that disclosers should take particular care when making soundings on instruments that have few actors and where the recipients may have information that would enable them to identify the investment in question.