Market Watch looks at use of orderbook data

The latest edition of Market Watch explains how FCA uses orderbook data to help conduct surveillance to identify suspected market manipulation.  It uses its own data combined the STORs and other notifications it receives under UK MAR to determine the most appropriate action – and many of the outcomes will not be public.

FCA uses a consolidated “helicopter” view of daily data to detect manipulative trading – and so accurate reporting by firms is key.

As a result of its surveillance, FCA has, for example, noted a firm using poorly designed algorithms, which have now been corrected, and identified potential spoofing by a trader at one firm that led to the firm providing additional staff training. These are, of course, in addition to its publicised actions against individuals.