In response to the FCA’s plans to conduct thematic reviews around benchmarks, information flows and market abuse, and receiving ‘Dear Compliance Officer / CEO’ letters – some with the requirement for senior management to sign an attestation to the regulator that they have robust systems and controls in place – our clients are increasingly reviewing and improving their market conduct and surveillance control frameworks.
Firms and trading venues are expected to have oversight of pre and post trade activity, whether conducted by their clients or their own employees. Regulators around the world have been issuing fines, not just for the act of committing market abuse, but also to firms for failing to detect abusive behavior through poor oversight and an inadequate internal control environment. This includes failing to submit suspicious transaction reports (STRs).
Below are some examples of how our subject matter experts can help your firm with your market monitoring and surveillance arrangements:
- Conduct a market abuse risk assessment across all asset classes and business models, identifying gaps and areas for improvement and recommending solutions that are fit for purpose and meet regulatory requirements
- Design and implementation of a tailored automated market surveillance system to generate alerts for detecting market abuse and financial crime within the organization
- Design and implementation of a tailored in-house manual surveillance processes for trading activities and financial instruments not suited to automated monitoring
- Develop a risk-based approach on how to set appropriate thresholds, look back periods and logic for effective market monitoring
- Design and implementation of voice and electronic communication surveillance systems
- Devise a risk-based approach between real-time monitoring and T+1 monitoring
- Conduct annual health checks and quality assurance exercises to ensure firms are keeping in line with regulatory developments and expectations and their market surveillance frameworks are still fit for purpose