FCA reports a drop in suspicious transactions

FCA reports a drop in suspicious transactions

The number of suspicious transaction and order reports (STORs) recorded by the UK's Financial Conduct Authority (FCA) has reduced for the first time since records began in 2016

As of the end of 2019, the FCA received 5455 reports of potential insider dealing (4623) or market manipulation (822). This compares favourably with the 5926 reports received in 2018. More than 600 reports were recorded in November while the vast majority were for transactions in equities.

The financial watchdog cited a number of possible reasons for the reduction, including a more robust approach to tackling financial crime among some regulated firms following the publication of the FCA's Financial Crime Guide in December 2018

The steps taken by some firms included more stringent reviews of clients' suitability when they have been the subject of an STOR and restricting their access where appropriate. "We believe these restrictions have resulted in less suspicious activity being facilitated by these firms and consequently a reduction in STORs," stated the FCA. 

And where the number of STORs rose in 2019, in the commodity and fixed income markets, the FCA cited improved detection capabilities among market participants and encouraged them to "continue developing surveillance capabilities". 

The FCA also referenced the number of market observations received in 2019. The market observations category was introduced last year for firms to report inappropriate transactions which they did not feel qualified as STORs. "Market observations provide us with valuable intelligence and we encourage their submission where a STOR is not appropriate," stated the FCA.

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