FCA Enforcement Actions on Market Abuse
Kinetic Partners, the global professional services firm, has released research showing that in 2013*, market abuse was a key priority for FCA enforcement. In 2013*, the FCA fined firms and individuals a total of £346,373,924 for market abuse related breaches.
Market Abuse as Second Most Cited Offense
Kinetic Partners’ research also found that market abuse was the second most cited offense among fines filed against either firms or individuals, numbering nine for the year – behind unfair treatment of customers, which accounted for ten fines. However, despite fewer actions being taken against market abuse, such breaches accounted for a greater share of the sum total of fines than any other category of violation during that period. In total, the FCA handed down fines totalling £48,158,900 for breaches related to unfair treatment of customers.
Industry Insights on FCA Priorities
Monique Melis, global head of consulting at Kinetic Partners comments:
“There has been a growing awareness of how significantly market abuse impacts institutions and consumers alike. As such, the FCA’s focus has been centred on the detection and prosecution of market abuse including insider dealing, trading and market manipulation. The large fines imposed for market abuse and their potential impact on a firm’s reputation is a valuable tool for deterrence and a high priority on the regulator’s agenda.
Key Compliance Lessons for Firms
“The key lesson from the FCA’s focus on market abuse is that firms must have robust central monitoring functions and compliance systems in place to ensure that both the firm and its employees are operating with integrity. It is of paramount importance that firms are vigilant about their internal monitoring and control mechanisms in order to maintain market confidence and ensure that any trading activities in which they engage are proper and clean.”
