The FCA has published a speech given by Patrick Spens (Head of Market Monitoring, FCA) entitled Surveillance: The FCA’s expectations and toolkits.
In his speech Mr Spens discusses some of the activities of the FCA’s market monitoring department in order to tackle market abuse and some of the tools that it has at its disposal. He also discusses the importance of why both Transactions Reports and Suspicious Transaction Reports (STRs) are vital in tackling market abuse and how these interplay with the FCA’s surveillance visits to firms and UK platforms.
In his speech Mr Spens mentions that STRs are a mandatory requirement placed on the industry to inform the FCA of any suspicious, or potentially abusive behaviour that it observes. In relation to “the industry” Mr Spens explains that this means all parts of the trading chain. He adds that the FCA has noted that some parts of this chain, notably inter-dealer brokers, submit fewer STRs than the FCA would perhaps expect, given their central role in many transactions and markets. STRs should be submitted for all financial instruments defined under legislation i.e. qualifying investments on prescribed markets and investments related to those, such as bonds, equities, contracts for difference, credit default swaps, warrants, options and futures.
In the final part of this speech Mr Spens states that the FCA has developed and is continuing to develop its in-house proprietary technology to detect suspicious behaviour in the marketplace. This technology will expand in line with the widening scope coming with the implementation of the Market Abuse Regulation.
View Surveillance: The FCA’s expectations and toolkits, 7 October 2014