The FCA has published its suspicious transaction and order reports (STORs) figures for the year ending December 2019.
The number of STORs had increased consistently since 2016; however, the data for 2019 appears to buck this trend. The FCA attributes this to a number of factors, including firms taking more robust steps to tackle financial crime risks and the FCA’s associated supervisory activity. Some firms are also now reviewing the suitability of clients whose trading may otherwise have been subject of a STOR and restricting their access to financial markets where appropriate. The FCA believes that these restrictions have resulted in less suspicious activity being facilitated by these firms, and consequently a reduction in STORs.
However, the 2019 data reveals that certain classes of STORs have increased, such as those relating to commodity and fixed income assets. The FCA has concluded that this shift is as a result of firm’s improved detection capabilities and it notes that the overall quality of STORs continues to improve every year.
The FCA has also seen an increase in the number of market observations received. Market Observation allow firms to submit information about market activity they have observed which is not necessarily appropriate as a STOR. These submissions, alongside STORs, provide the FCA with valuable intelligence and assist with the identification of harm in financial markets.