On 17 April 2019, the FCA published the latest issue of Market Watch (no. 59), its newsletter on market conduct and transaction reporting issues.
This issue of Market Watch covers:
- transaction reporting observations from the FCA. The FCA discusses some of the issues its Markets Reporting Team have found regarding the accuracy and completeness of transaction reporting and instrument reference data. The FCA stresses the importance of market participants maintaining adequate procedures, systems and controls to meet their transaction reporting obligations;
- telephone recording and retention. The FCA has observed that some firms have not properly ensured that conversations are being recorded, despite having telephone recording systems installed. In some cases, several months passed before firms realised that telephone conversations were not being correctly recorded due to system failings. The FCA reminds firms of the importance of ensuring that they have the systems in place to record telephone conversations and are undertaking the appropriate checks to ensure that calls are consistently recorded; and
- use of client codes. The FCA has observed some trading venues’ member firms using different ‘short codes’ for the same client over time. The FCA is concerned that, as a result, the use of ‘short codes’ may not be as effective as using ‘long codes’ from a market abuse surveillance perspective. In addition, the FCA has also observed member firms making errors when the short-to-long code mapping is provided to the trading venue. This results in incorrect data being stored by the trading venue, with an adverse impact on their ability to perform market abuse surveillance.