The FCA is reportedly sending questionnaires and making supervisory visits to asset management firms, focusing on their market abuse surveillance.
This supervisory work is a follow-up to the FCA's 2014 thematic review, which led to the FCA publishing Thematic Report 15/1: Asset management firms and the risk of market abuse. Firms will be expected to have taken note of the feedback and good practice indicated in the Thematic Report and implemented changes, as required, to satisfy the FCA that they have robust market abuse controls in place. With a particular focus on post-trade monitoring systems, firms should also be aware of the recent final notice against Interactive Brokers (UK) Limited for poor market abuse controls and failure to report suspicious client transactions.
We have extensive experience in advising asset managers on market conduct issues and controls and can give practical advice to firms seeking to review their systems or wishing to discuss a supervisory visit.
Examples of the questions asked of asset managers in the questionnaire, seen by Investment Week, include: • Do you require order and trade rationales to be documented before being submitted? • Do you undertake surveillance (automated or manual), outside of front office, of your trading activities for market abuse? • Do you have any communications surveillance in place (e.g. Bloomberg key word monitoring, email monitoring, phone monitoring)?