We are consulting on changes to the Financial Crime Guide for firms (the Guide), proposing to add a chapter on insider dealing and market manipulation and make miscellaneous changes as a result of recent regulatory changes to ensure the guide remains up to date.
Financial crime captures a broad range of criminal offences, including insider dealing and market manipulation. The Guide does not currently provide firms with guidance in relation to countering the risk of insider dealing or market manipulation, so we therefore want to assist firms by adding a chapter relating to these offences.
Julia Hoggett, Director of Market Oversight at the FCA, noted in her speech on 14 November 2017 that where institutions have had repeated concerns about the trading behaviour of a client then it is legitimate for the FCA to ask whether the institution has properly considered its regulatory obligations to counter the risk of financial crime.
This publication reiterates that message, and provides an opportunity for firms to comment on our proposals on how we expect them to comply with the requirements of SYSC6.1.1R. We recognise that some firms separate their surveillance function from their financial crime or MLRO teams. Where firms adopt this approach it is important that they ensure that there is adequate communication between the two areas such that the firm can effectively counter the risk of insider dealing and market manipulation.
We are also proposing minor amendments to other parts of the Guide to reflect recent regulatory changes and ensure the Guide remains up to date.
This guidance will be of interest to firms who are subject to the financial crime rules in SYSC 6.1.1R, and who arrange or execute transactions in financial markets.
Please send us your comments by 28 June 2018:
You can send your response in the following ways:
We make all responses to formal consultations available for public inspection unless the respondent requests otherwise. We will not regard a standard confidentiality statement in an email message as a request for non-disclosure.
We will carefully consider your feedback to this consultation and issue a response in Autumn 2018.