The FCA is keen to put "on notice" any would-be market abusers of its much improved “radar” for detecting misconduct in the markets.
Alongside significant cross-border information sharing, the FCA now has a triad of data sources to ingest and measure movements in the market in real-time:
- MiFID II transaction reports – to the tune of 9.8bn in 2019;
- FTSE 300 order book – which consists of 150m order reports per day; and
- Suspicious Transaction & Order Reports (STORs) provided by market participants - approximately 6,000 in a year.
Surveillance of transaction reports and the equity order book in tandem enables the FCA to identify manipulative trading much more easily than before, and enables it to catch market manipulation and where false and misleading statements have contributed to the destruction of considerable shareholder value in listed companies.
Mark Steward, Executive Director of Enforcement and Oversight noted that the “consolidation of this data gives us the capacity to examine what is happening in our markets with increasingly bright lights in close to real time which would not otherwise be possible.”
The endgame is surely noble and ambitious: “[t]hese are cases not many other regulators or law enforcement agencies choose to take on but we must if we want to ensure our approach to market abuse is not unduly narrow or limited and that that we are prepared to tackle the hardest cases”, but the realist in me fears the (inevitable?) error message: information overload.
It remains to be seen if the FCA have the capacity and resources to maximise the potential from the data collected in a timely and effective manner; and if this rich data source leads to an uptick in enforcement action across market participants.
“[t]hese are cases not many other regulators or law enforcement agencies choose to take on but we must if we want to ensure our approach to market abuse is not unduly narrow or limited and that that we are prepared to tackle the hardest cases”