FCA Highlights Insider Trading Risk and Compliance

    

The Financial Conduct Authority (FCA) issued an edition of Market Watch this month that shares the regulator’s concerns and findings about control of access to inside information. In the publication, the FCA highlighted the conviction of Fabiana Abdel-Malek, a former Compliance officer in the London branch of a major investment bank.  

According to the FCA, Abdel-Malek repeatedly accessed electronic compliance systems containing inside information about several then non-public, price-sensitive corporate transactions. She passed that information to a private individual and not an employee of the bank, who used it to trade CFDs on relevant securities. 

Allowing widespread and unchallenged access to inside information increases the risk of such information being disclosed unlawfully. Firms also risk being caught up in unlawful disclosure and insider dealing investigations, according to the FCA, and may expose themselves to regulatory action and significant reputational risk.   

It’s important for firms to be able to identify conduct risks to ensure they have effective market abuse controls in place. And having systems and controls to manage how inside information is communicated outside a firm are as important as having in place effective controls to manage that information within the firm.  

To learn more, read the FCA’s August Market Watch  and MCO's Quick-Start Guide to Inside Trading Compliance.  

 

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