Exchanges to lead on intra-market abuse

The Financial Services Authority has agreed that the UK stock exchanges will carry out front-line inquiries into market abuse by their members.The regulator has signed understandings with the London Stock Exchange, Liffe, the International Petroleum Exchange, Jiway, Virt-X, OM London, the London Metal Exchange and Coredeal. They will police market abuse cases and apply their own enforcement measures when the suspect parties are all members of the same exchange. However, in more complex operations the FSA is likely to take action. Speaking at the signing of the accords, Gay Huey Evans, Director, Markets and Exchanges Division, said “We will ask ourselves three basic questions to help determine how best to proceed: What is the nature and gravity of the behaviour involved? Who is best in a position to pursue the alleged perpetrator? What is the feasibility of pursuing the case to a successful conclusion?” She went on to say that the regulator would prioritise cases where prompt action could forestall further harm to consumers and markets. Another consideration will be whether FSA enforcement action would act as a deterrent to similar behaviour in the future.The FSA publishes a Market Conduct Newsletter and operates a dedicated helpline (tel 020 7676 4900; email market.abuse@fsa.gov.uk) during office hours.