The FCA’s 2016/2017 annual report illustrates that market abuse is currently its most significant enforcement priority. In particular:
- 235 new enforcement investigations were opened in 2016/2017 (excluding unauthorised business and applications to revoke/vary permissions). Nearly 50% of these investigations related to market abuse, mostly insider dealing.
- There were over 3000 STORs in 2016 – nearly double the amount of STRs in 2015. Some increase was to be expected following the MAR requirement to report suspicious orders as well as transactions, but firms were already encouraged to take that approach.
- In nearly 20% of all public takeovers during the year, the FCA identified “abnormal” price movements in the two days preceding the announcement. This is not necessarily indicative of insider dealing and it is often not possible to isolate the predominant cause of market movements. It is nevertheless a basis for the FCA to start an enforcement action given the current trend of a low threshold for commencing an action.
- The FCA has again emphasised its intent to pursue market abuse using both regulatory and criminal enforcement powers. It has also commented that “in our surveillance and enforcement efforts we aim to be responsive, active and effective in detecting and investigating instances of market abuse across the broad scope of asset classes and behaviour types.”
The BLP regulatory enforcement team has extensive experience advising on market abuse investigations and achieving successful outcomes for clients, including the avoidance of enforcement action or an early discontinuance. We also frequently advise clients on their policies and procedures in order to ensure that firms have appropriate systems and controls in place to try to prevent market abuse from occurring. If you require any assistance in this area, please do not hesitate to get in touch.