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Beyond spoofing
Recent regulatory exam findings on market manipulation and spoofing signal concern about broader compliance program issues at investment firms
Recent enforcement actions by global regulators for spoofing manipulation attempts present a clear signal that firms need to address and enhance aspects of their supervision and surveillance programs. Spoofing is one of many manipulative trading strategies performed by rogue traders in different products and markets. Other prohibited acts include price and benchmark manipulation, front running, momentum ignition, wash trades, and pump and dump schemes. The recent number of fines and size of fines levied represents a broader enforcement effort by global regulators against market manipulation, and represents a subset of notable fines globally over the past three years. For example, between August and September 2020, the Commodity Futures Trading Commission issued seven enforcement actions on spoofing alone.
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February 2021 market abuse outlook
Overview of Global regulatory priorities and focus areas
In financial markets, market abuse is intentional conduct that violates market integrity and natural demand-supply dynamics through unfair trading practices, price manipulation, misuse of privileged information, creation of unfair market conditions, and deception of market players.
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Impact of covid-19 on front-office oversight at financial institutions
At a time when the COVID-19 disruption has triggered historic levels of trading volumes and market volatility, financial services organizations–like the rest of the economy–had to address the added challenge of a mass migration of employees to work from home.
Learn more in this article from the Wall Street Journal Risk & Compliance Journal
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Managing conduct risk
Conduct is a lens into the culture of organizations, and conduct failings seem to be widespread across several jurisdictions, cut across financial services organizations and involve both the retail and wholesale sides of business. Improving conduct within the industry is an essential part of rebuilding trust and supporting future sustainable growth. Further, the regulatory focus on conduct is expected to persist and firms will continue to face pressure to be alert to poor behavior.
To help financial services organizations be proactive about misconduct, this paper, from the Deloitte Center for Regulatory Strategy, explores its fundamental drivers, the various industry and regulatory initiatives that have arisen in response, and some of the emerging technologies firms can enlist to help manage conduct risk.
