Julia Hoggett has spoken on the importance of regulators maintaining focus on ensuring markets work well for consumers and are orderly and clean, whatever the challenges. She spoke about how FCA aims to place the market abuse risk assessment at the heart of how it encourages firms to look for market abuse, rather than focussing narrowly on the specific offences. FCA also carries out regular assessments on typologies of market abuse to understand the prevalent risks. It has been looking particularly at the volatility of the markets and maintaining appropriate trade surveillance throughout the crisis. There have been increased alerts resulting from increased market volatility, which firms have managed in various ways.
It is also important to carry out surveillance based on the way in which risks manifest themselves. But firms overall still need to escalate and report potentially suspicious activity by using the bar of whether “reasonable suspicion” has been met. FCA does not want poor quality STORs – and it is pleased that, during the pandemic, although numbers fell for a while, the quality did not go down and the numbers of reports are now back at expected levels. It is important, though, for firms not to allow a backlog to arise.
She also noted that firms seem to have now overcome the initial challenges of not being able to carry out the usual levels of recording and surveillance – and FCA expects firms to have updated their policies, refreshed their training and put in place rigorous oversight, including regarding the use of privately owned devices.
Another concern of FCA is whether the compliance teams can properly support and advise in a remote working environment. Firms can partly address these risks through ensuring a strong culture.
Finally, the risk of PA dealing while staff are working from home – firms must be alive to the risks of “singles stock events”, and, when making enquiries, should take care to avoid tipping off.