MNPI Remains a High Risk Area for Compliance

Failing to adequately manage Material Non-Public Information (MNPI) remains a high risk area for compliance, as evidenced by recent actions in the U.S. and the U.K. A private equity firm paid $1 million to settle SEC charges for failing to implement effective Insider Trading compliance policies. The FCA published a Decision Notice fining a former CEO £658,900 for market abuse and banning him from future roles linked to regulated activity.

To avoid hefty fines and actions, firms must have comprehensive and actionable policies and procedures around the management of MNPI and insider lists to minimize risk.

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FCA Consults on Extending SMCR Deadlines

The FCA is consulting on extending the deadlines for the SMCR for solo-regulated firms until 31 March 2021. This delay will give firms, significantly affected by the Covid-19, time to make the changes they need. 

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FCA seeks to fine and ban CEO for market abuse

The Financial Conduct Authority (FCA) has published this week a decision note about the CEO of Worldspreads (WSL), Conor Foley. The FCA is seeking to fine Mr Foley for market abuse and ban him from working on regulated activities. The decision note was published on July 7 but follow an investigation that started in 2012. The FCA accuses the executive of committing market abuse by disseminating false information and manipulate transactions.

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Regulatory Focus on Conduct and Culture

The global workforce has been under pressure since March, when the lockdown started in most countries. Since then, the stress and financial pressure caused by COVID-19 and the uncertainty to industries, organizations and employees has increased. Governments and regulators are under pressure to deliver normality while reducing the economic and market impact of the crisis.

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Remote working increases market abuse risks

At the beginning of the Covid-19 crisis, the FCA released a statement, where the regulator has shown its concerns regarding companies’ capacity to fight against market abuse considering the context of new working conditions. Earlier, the FCA’s Executive Director of Enforcement and Market Oversight at the FCA, Mark Steward gave a speech on market integrity and how the regulator has been approaching and investigating market abuse cases.

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