Market Watch 86 - test

In this Market Watch, we share our observations from our recent supervisory visits to UK retail brokerage firms. We reviewed the systems, controls and governance arrangements firms use to identify and report potential market abuse.

In this article, 'retail brokers' refers to UK brokerage firms serving predominantly retail clients. These firms facilitate significant volumes of retail trading in single-stock equities and play an important role in identifying and reporting potential insider dealing. While insider dealing is the principal market abuse risk for these firms, they are also exposed to forms of market manipulation such as pump and dump.

We visited 7 retail brokers to assess the effectiveness of their market abuse surveillance arrangements. We focused primarily on firms’ arrangements regarding insider dealing, but we also considered their controls for mitigating market manipulation risks.

While our findings are drawn from our visit to retail brokers, they may also be relevant to other types of firms.

Market Watch 69[1] and Market Watch 73[2] discuss related themes and may be informative for readers of this article.