Market Watch focuses on insider dealing risks

The latest edition of  FCA’s Market Watch focuses on FCA’s concerns on access to inside information, following the conviction of a former compliance officer for sharing information. FCA noted that Fabiana Abdel-Malik was named on the relevant insider lists, but in fact had no business need to access the information in question. It says firms increase the risks of information being disclosed unlawfully be allowing “widespread and unchallenged” access to individuals who do not need it to do their jobs.

FCA highlights warnings it has previously given about these risks, and how it fits within questions 1 and 3 of its 5 Conduct Questions – that firms should proactively identify conduct risks and put in place support to enable those who work for the firm to improve the conduct of their business or function.  FCA says it often finds that firms have omitted from insider lists individuals who are provided with or who otherwise access inside information, which hinders investigations.  It has pointed out in a 2015 Thematic Review its concerns about controls over the flow of insider information and, more recently, criticised investment banks for allowing large numbers of support staff access to inside information that they did not require, and for not considering and appropriately restricting the amount of access required. FCA also found lack of monitoring and audit trails, and found lists were often set up in such a way as to make effective monitoring impossible.


Emma Radmore