The UK’s Financial Conduct Authority (FCA) has issued Citigroup Global Markets with a fine of more than £12 million for failing to properly implement the EU’s Market Abuse Regulation (MAR) trade surveillance requirements. The failure meant that Citigroup Global Markets could not effectively monitor its trading activities for certain types of insider dealing and market manipulation.
MAR, introduced in 2016, mandates that firms must monitor both orders and trades to detect potential and attempted market abuse, across a broad range of markets and financial instruments.
The FCA found that the firm failed to properly implement the new requirement when it was introduced, and took a further 18 months to identify and assess the specific market abuse risks its business may have been exposed to as a result. The flawed implementation resulted in significant gaps in the firm’s arrangements, systems, and procedures for additional trade surveillance, according to the FCA.
“The framework for market integrity depends on the partnership between the FCA and market participants using data to detect suspicious trading,” commented Mark Steward, Executive Director of Enforcement and Market Oversight at the FCA. “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 has agreed to resolve the case and qualified for a discount, reducing what would have been an £18 million fine by 30%. In a statement, the firm said it was pleased to put the matter behind it.
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