FCA’s approach to market surveillance
In a speech to the British Bankers Association at their Market Abuse Conference the FCA’s Head of Market Monitoring, Patrick Spens, announced some of the detection methods they have used to secure 10 convictions and 100 “private outcomes” since the FCA’s creation.
He stressed the importance of Suspicious Transaction Reporting (STR) for firms regulated by the FCA who deal with regulated securities and said “be assured that we do not tolerate poor surveillance performance”.
Sanctions have already been imposed for poor reporting, with Deutshe Bank receiving a fine of £4.7million for incorrect transaction reporting.
The FCA process around 13million transactions a day and use their state of the art “Zen” software to analyse trading and monitor transactions and datasets.
The FCA also undertakes surveillance visits to regulated firms where they analyse their STR policies, procedures and recent STR submissions.
Regulation surrounding STR’s
The FCA’s Handbook at SUP 15.10 and SYSC 6.1.1R state that a firm must establish, implement and maintain adequate policies and procedures that will counter the risk of activities that may further financial crime.
Firms which do not implement these procedures and policies may face substantial fines and sanctions from the FCA, therefore, firms should ensure that the activities of their employees and clients are subjected to thorough and properly implemented policies and procedures.