FCA Fines BGC for Oversight Failures
Posted by Colin Lambert. Last updated: December 8, 2022
The UK’s Financial Conduct Authority (FCA) has fined BGC and related entities over £4.77 million for oversight failures across its broking businesses – the regulator says the firm failed to ensure it had appropriate systems and controls in place to effectively detect market abuse.
Although the enforcement notice does not mention foreign exchange, it does highlight failures around trade monitoring at the ECB FX rate fix and the WMR London 4pm Benchmark Fix, in addition to other failures in futures, fixed income and equities across both BGC and its subsidiary GFI.
The FCA says that tetween July 2016 and January 2018, BGC/GFI had manual, automatic and communications surveillance processes that were deficient, and therefore, inadequate in properly addressing the risk of market abuse. Additionally, the firms’ systems for monitoring market abuse did not have proper coverage of all asset classes which are subject to the UK’s Market Abuse Regime (MAR).
BGC/GFI agreed to resolve the case at an early stage and qualified for a 30% discount, and the FCA says that the firms have since enhanced their systems and controls.
“Oversight of our markets is a regulated partnership between the FCA and market participants and so gaps or holes in a firm’s ability to monitor and detect abusive trading poses direct risks to market integrity,” says Mark Seward, executive director of enforcement and market oversight at the FCA. “This case is another example of the FCA’s determination to ensure firms prioritise market integrity and the maintenance of high standards of compliance.”