BUILDING OUR UNDERSTANDING OF THE MARKETS
Our regulatory approach to investment markets
Our approach in this broad area of regulation will be characterised by:
• Seeking to influence EU and global policy development (for example, in the European Securities and Markets Authority, in the International Organisation of Securities Commissions and the Financial Stability Board).
• Adopting higher standards than minimum EU requirements where appropriate, for example, in relation to maintaining the quality of the UK primary markets.
• Delivering robust and tailored specialist supervision in a number of areas(18) by taking advantage of new supervisory and disciplinary powers available to us.
• Using policy expertise and supervisory assistance for our re-invigorated and more systematic focus on wholesale conduct issues.
• Supporting the pursuit of the credible deterrence enforcement strategy alongside educational work in all areas of Markets Division’s regulatory responsibilities.
• Enhancing our use of regulatory data, such as transaction reports, for surveillance and risk identification.
• Collaborating internally and with other regulators to identify and mitigate risks.
The impact of regulatory action on market abuse
Measuring how often insider trading and other forms of market abuse take place, and understanding how the action we take affects the level of abuse, will help us assess and improve our performance.
The Market Cleanliness Statistic was developed to gauge insider trading before important corporate announcements. In 2010 and 2011 there was a marked fall in abnormal pre- announcement price movements from around 30% over the six previous years to around 20% (meaning that 20% of takeovers had abnormal pre-announcement price movements – the figure is expected to be around 10% if no insider trading takes place). This drop coincides with the FSA’s greater emphasis on pursuing market abuse enforcement action, as well as a change in the supervisory approach and more education work with firms.
We will build on this with our unique financial transaction database, known as ZEN. We will use ZEN to develop a range of rigorous and reliable statistics that reflect the level of suspicious trading activity in all of the UK’s diverse and complex financial markets. This will underline our aim to clamp down on market abuse and support our enforcement strategy. It will also allow us to measure our performance and continuously improve our market abuse systems.
18 Specialist supervision areas: client money and assets; market infrastructures; regulated covered bonds; sponsors, suspicious transaction reporting regime; transaction reporting regime.
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62