Bringing you live news and features since 2006 


Regulators to focus on market abuse, says survey


Market abuse is expected to be one of the primary focuses of regulators in the coming year, according to a global survey of nearly 300 finance professionals conducted by Kinetic Partners. 

Regarding what respondents believed the priority for regulators would be in 2015, twice as many senior executives cited market abuse as those who named tax-related investigations, the next most commonly cited issue.
The results of the survey, analysed in Kinetic Partners’ annual Global Regulatory Outlook report, show 37% of those surveyed (and 44% of C-suite executives) named market abuse as a key issue for regulators, ahead of tax-related issues which were mentioned by 24% of respondents (and 22% of C-suite respondents).

The breakdown of responses by geography indicate that the industry envisions market abuse to be a key issue globally, with 52% in the US and 35% in Hong Kong anticipating that it will be a central area of regulatory focus.
Simon Appleton, a director at Kinetic Partners in London, says: “Financial services professionals are right to expect regulators to continue to clamp down hard on market abuse, such as insider trading, market manipulation and financial fraud. These already account for many of the fines in key jurisdictions, and the past year has continued to see regulators impose large fines on firms.”
Kinetic Partners’ survey also found that technology was core to firms’ responses. More than one in five (22%) said that their technology investment would concentrate on market and transaction monitoring systems in 2015, putting it behind only regulatory reporting (27%) and AML/knowing your customer systems (23%).
Nick Matthews, Managing Director in the Duff & Phelps Dispute and Legal Management Consulting practice, says: “More than ever, regulators are expecting not just compliance from firms but for them to play an active role in enforcement. The best defense firms have against punitive measures is to identify abuse and report it before it comes to the regulator’s attention. Even banks with sophisticated market monitoring systems in place need to ensure their investment in technology not only meets regulators’ expectations, but also keeps pace with developments in the industry.”
While issues such as bribery seem to be attracting less regulatory attention (with only five percent of survey respondents expecting regulators to prioritise it), others, such as high frequency trading (HFT), have risen rather rapidly up the agenda. HFT was fourth in the list of concerns regulators were expected to focus on, as noted by 17% of respondents overall (and 18% of senior executives), putting it ahead of AML.
Appleton says: “Regulators are really only beginning to tackle HFT market abuse. The first enforcement action at the SEC was only in October 2014, but that trickle of cases is likely to increase fast. Regulators expect firms’ systems for preventing disorderly markets and identifying market abuse to keep up with changes in the marketplace.”

Latest News

ETF data consultant ETFGI reports that assets invested in the global ETF industry reached a new record of USD12.71 trillion..
Calastone has published an ETF white paper which examines several of the processes that take place across the lifecycle of..
Adapting product lines to fit into changing methodologies and meet shifting demand is essential to remaining relevant in the industry..
Investors urgently need greater access to diversified investment strategies aligned with the Paris Agreement on climate change if the world..

Related Articles

Taylor Krystkowiak, Themes ETFs
Themes ETFs opened its doors in December 2023, with an introductory suite of 11 ETFs – seven thematic and four...
Konrad Sippel, Solactive
At the end of March, financial index specialist, Solactive, published its 2024 annual report on future trends.  ...
Lorraine Sereyjol-Garros, BNP Paribas
Following changes to the French Monetary and Financial Code and of the French market authority AMF’s General Regulation, it is...
Ed Rosenberg, Texas Capital
Texas Capital Bank first opened its doors back in December 1998 and nowadays offers wealth-management services, as well as commercial,...
Subscribe to the ETF Express newsletter

Subscribe for access to our weekly newsletter, newsletter archive, updates on the site and exclusive email content.

Marketing by