In a February 6, 2020 speech by Mark Steward, Executive Director of Enforcement and Market Oversight at the Financial Conduct Authority (FCA) described the successful results of a strategic and integrated approach to the FCA’s market integrity efforts. These efforts included enforcement, primary and secondary oversight and surveillance and wholesale supervision. Further, he issues a warning to would-be market abusers that the FCA’s increased detective power materially improved the FCA’s capabilities to detect problematic behavior. In the speech, Mr. Steward described the FCA’s strategic decision to ingest order book data to better detect manipulative trading and insider trading. In another speech this past February, Mr. Steward concluded that the amount of surveillance and investigation work conducted in the past year led to reduced activity by certain “actors” whose trading prompted high numbers of suspicious transaction and order reports. The implicit message is that the FCA will continue to use proactive investigative techniques as a critical tool in combating market manipulation,and they will assess the effectiveness of each firm’s own monitoring capabilities.
In the past year, the FCA has continually reminded market participants to focus on market abuse surveillance. Market Watch 63 focused on inside information as remote work became a reality. Market Watch 65 provides firms a reminder on handling of information requirements during preliminary FCA reviews of, and investigations into, suspected market abuse. And we know from Mr. Seward’s February 2021 speech, the FCA is actively pursuing a number of insider trading and market manipulation cases. While there have not been as many relevant enforcement actions in the UK as compared to the US, the FCA has certainly given the industry plenty of guidance that they will step up their investigative and enforcement efforts, and they will assess the effectiveness of each firm’s own monitoring capabilities.
ViP: With our subject matter expertise in market manipulation surveillance, we have been working closely with our partners and clients in the UK to continually meet our client’s needs in the UK. Validus allows our UK clients to easily and quickly update surveillance procedures to match their needs based on their respective risk assessments. For example, we recently made a series of enhancements by updating our base insider trading procedure and developing new, related visualizations. We updated our base insider trading procedure to cast a wider net and better mitigate market data gaps or failures. We also developed a new visualization model that integrates news and alert events to provide analysts a quick, accurate view of each candidate alert.
About Eventus Systems
Eventus Systems is a leading global provider of multi-asset class trade surveillance and market risk solutions. Its powerful, award-winning Validus platform is easy to deploy, customize and operate across equities, options, futures, foreign exchange (FX), fixed income and digital asset markets. Validus is proven in the most complex, high-volume and real-time environments of tier-1 banks, broker-dealers, futures commission merchants (FCMs), proprietary trading groups, market centers, buy-side institutions, energy and commodity trading firms, and regulators. The company’s rapidly growing client base relies on Validus and Eventus’ responsive support and product development teams to overcome its most pressing regulatory challenges. For more, visit www.eventussystems.com.