Recent activity points to the FCA rapidly increasing its focus on market abuse risk, trade surveillance and controls. This activity possibly pre-empts upcoming thematic work or supervision and enforcement work in this area.
Market Abuse was referenced as damaging to wholesale markets in the FCA’s 2018/19 Business Plan and the regulator published proposed new guidance (for consultation) back in March of this year, with a new chapter in the Financial Crime guide dedicated to good practices in relation to detecting, reporting and preventing insider dealing and market manipulation (to assist in complying with the Market Abuse Regulation (‘MAR’)). That final guidance is keenly awaited.
“For an effective approach to enforcement, the FCA will not just focus on imposing larger and larger penalties. Sanctions are only one element as good enforcement requires robust, accurate and faithful processes for detecting misconduct in all its guises and acting quickly and effectively.”
- Mark Steward, Director of Enforcement and Market Oversight Financial Conduct Authority, 14th June 2018.
However, adding more recent intensity, the FCA sent out a Questionnaire “The Risk of Market Abuse in Asset Management Firms” in July this year to a broad range of firms, requesting details on their arrangements and procedures. This focused on the way firms’ investment and execution strategies influence the controls it has implemented, including policies, surveillance, personal account trading procedures, and staff training.
Then, towards the end of September, the regulator published Market Watch 56 which included ‘observations’ and several key pointers to the FCA’s expectations on market abuse surveillance.
This can be considered a clear message to firms and points to a possible examination of surveillance and compliance controls relating to market abuse and a probing of firms’ internal education to further evidence efforts to prevent market abuse.
How Can ACA help?
In immediate response to this heightened scrutiny, ACA has configured a unique solution – designed to help get ahead of these supervisory concerns, add a human-cost reality and neatly round-off this year's compliance monitoring programme.
ACA’s Focused Market Abuse Controls Review is a special, cost-effective two-part MAR programme designed to independently review and educate, including:
- An on-site, independent review of market abuse prevention and surveillance controls; and
- Two invitations to an exclusive evening reception next month, where Tom Hardin (A.K.A. Tipper X) – former insider trader, turned FBI covert witness, who found himself at the centre of the biggest insider-trading case in a generation – will share his experiences and insights. Seats for this programme will be limited.
ACA's review will:
- Examine your market abuse policies and procedures for relevance and completeness,
- Evaluate the robustness of your firm’s market abuse monitoring,
- Assess your surveillance techniques, and
- Consider your control environment by conducting interviews with non-compliance staff.
Findings and recommendations designed to strengthen your arrangements are delivered in an exception report and discussed with the firm to assist with practical implementation. This work can be documented for future FCA consideration.
For More Information
Please contact Ron Weekes at firstname.lastname@example.org, Dean Rigby at email@example.com or your regular ACA contact to find out more detail, arrange dates for your review and confirm attendance at this unique market abuse-themed event.