Market abuse was a key priority for Financial Conduct Authority (FCA) enforcement in 2013, according to research by Kinetic Partners.
During the year, the FCA fined firms and individuals a total of GBP346,373,924 for market abuse related breaches.
Kinetic Partners’ research also found that market abuse was the second most cited offence 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 GBP48,158,900 for breaches related to unfair treatment of customers.
Monique Melis, global head of consulting at Kinetic Partners, says: “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.
“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.”
