The FCA required all seven retail brokers in a supervisory review to strengthen their market-abuse surveillance, according to Market Watch 86, published on 14 October. Each had automated systems and written procedures; the regulator found material weaknesses in how those arrangements worked.[1]
The findings trace surveillance from the transactions entering a system to the decision to report them. Relevant alerts, consistent investigation and accountable management all have to work for an automated product to provide meaningful coverage.
Where the FCA found weaknesses
| Area | Observed problem |
|---|---|
| Investigations | Requiring evidence linking a client to an issuer before escalating other suspicious factorsSource 1 |
| Calibration | Uniform price thresholds across stocks with different volatilitySource 1 |
| Coverage | Minimum trade values excluding substantial client activitySource 1 |
| Systems knowledge | Insufficient understanding of vendor settings and alert logicSource 1 |
| Oversight | Limited senior-management understanding and fragmented responsibilitySource 1 |
Suspicion must not become a proof requirement
The FCA’s reporting guidance requires UK venues and persons professionally arranging or executing transactions to report suspicious transactions and orders without delay. The threshold is reasonable grounds for suspicion, including suspected insider dealing or manipulation. Reports should explain the basis for the suspicion and include relevant trade data and supporting material.[2]
That duty serves a different purpose from a criminal investigation. A broker can observe a trading pattern without knowing who supplied information or whether a customer is connected to an issuer. Requiring a complete explanation of the suspected offence before reporting would make the intermediary’s detection role depend on information it may be unable to obtain.
The FCA says remediation improved the clarity and completeness of reports. Some firms were also subject to skilled-person reviews. The relevant operational outcome is a better explanation of why trading deserves attention, supported by the evidence available to the firm.[1]
Coverage depends on the business being monitored
The FCA identifies testing above and below thresholds and using synthetic trading scenarios as ways to assess detection. For example, a scenario placed just below a minimum-value filter can show whether related smaller trades are being missed before they reach an investigator. Alert volume alone would not reveal that gap.[1]
Earlier FCA work on CFD providers supplies relevant background, although it was a different review. Market Watch 73, first published in April 2023, found most insider-dealing surveillance effective but identified weaknesses in non-equity coverage and manipulation controls. It also highlighted the importance of unrealised profits and sufficiently long lookback periods.[3]
That earlier review points to the same practical requirement through a different product mix: follow the instrument, customer behaviour and execution arrangement through to the alert, investigation and named decision-maker. Vendor configuration and internal supervision are parts of the same control chain.[1][3]
Separately, the FCA and National Crime Agency arrested three people on 13 October in an investigation into suspected organised insider dealing and money laundering. Searches covered five homes in London and Manchester. The announcement described suspects being interviewed and did not announce charges. The FCA has not linked that operation to the seven-broker review.[4]
Remediation is already the consequence for the seven reviewed brokers. For system providers, explainable alert logic and demonstrated coverage give customers evidence they can use to calibrate and supervise the product after deployment.[1]
Sources & further reading
- Market Watch 86: retail brokers’ market-abuse surveillance Financial Conduct Authority · 14 Oct 2026 · Accessed 20 Oct 2026
- How to report suspected market abuse as a firm or trading venue Financial Conduct Authority · 4 May 2016 · Accessed 20 Oct 2026
- Market Watch 73: CFD market-abuse peer review Financial Conduct Authority · 26 Apr 2023 · Accessed 20 Oct 2026
- Three arrests in major FCA operation against criminal insider dealing ring Financial Conduct Authority · 13 Oct 2026 · Accessed 20 Oct 2026