FCA finds varying standards across SMEs’ market abuse measures

The market abuse risk assessments of somesmall and medium-sized firms lack the necessary comprehensive and tailoreddetail, and there are also instances where little or no monitoring is takingplace, the financial regulator has found.Denis O’Connor examinesits latest Market Watch.

Denis O’Connorisa fellow of both the Institute of Chartered Accountants in England & Walesand the Chartered Institute of Securities and Investment. He was a member ofthe British Bankers’ Association Money Laundering Committee from 2003-10 and amember of the Joint Money Laundering Steering Group’s board and editorial panelbetween 2010 and 2016. He has been a frequent speaker at industry conferenceson financial crime issues, both in the United Kingdom and abroad.

In the recent publication of Market Watch,[1] the Financial Conduct Authority discussed its reviews of the monitoring andsurveillance efforts of small and medium-sized firms in accordance with therequirements of article 16(1) of the UK Market Abuse Regulation. The regulatoralso discussed its observations of firms’ systems to counter financial crime,specifically market abuse, as per SYSC6.1.1R. Finally, the FCA made someobservations about when firms should submit a Suspicious Transaction and OrderReport (STOR). Some firms appear not to have implemented effective controlsdiscussed in previous editions of Market Watch going back to 2015.