FCA Fines Citigroup £12.6m for not Detecting Market Abuse

Automation Key to Trade Surveillance

The Financial Conduct Authority (FCA) has fined Citigroup Global Markets Limited (Citigroup Global Markets) £12,553,800 for failing to properly implement the Market Abuse Regulation (MAR) trade surveillance requirements relating to the detection of market abuse.

By failing to properly implement the MAR trade surveillance requirements, Citigroup Global Markets could not effectively monitor its trading activities for certain types of insider dealing and market manipulation.

MAR was introduced in 2016 and expanded requirements to detect and report potential market abuse. It introduced a requirement to monitor both orders and trades to detect potential and attempted market abuse across a broad range of markets and financial instruments.

However, the FCA found that Citigroup Global Markets failed to properly implement the new requirement when it took effect, and took 18 months to identify and assess the specific market abuse risks its business may have been exposed to and which it needed to detect. Citigroup Global Markets’ flawed implementation resulted in significant gaps in its arrangements, systems, and procedures for additional trade surveillance.

Mark Steward, Executive Director of Enforcement and Market Oversight, commented:

‘The framework for market integrity depends on the partnership between the FCA and market participants using data to detect suspicious trading. By not fully implementing the new provisions when required, Citigroup Global Markets did not carry its full weight in this partnership, impacting market integrity and the overall detection of market abuse.’

Citigroup Global Markets agreed to resolve this case and qualified for a 30% discount. Without this discount, the fine would have been £17,934,030.

Source: FCA

Related articles

  1. Credit Suisse’s strategy is good news for its 2,800 employees at Madison Avenue

    The bank is executing on strategic initiatives including potential divestitures and asset sales.

  2. With Natacha Dezert and Aman Mehta of BNP Paribas Securities Services.

  3. Meeting convenes influential voices shaping capital markets from a cross-section of public policy and finance.

  4. TP ICAP Group has a wider ambition to be the broker for the energy transition.

  5. Bank failed to report OTC options positions in more than 7.4m instances.