FCA Warns Wholesale Firms About Broker Risks To Market Fairness
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The UK’s Financial Conduct Authority (FCA) shared concerns about brokers in wholesale firms and warned these companies to follow strict rules to protect the fairness of markets. The FCA sent a letter to company leaders, sharing its worries about issues such as insider trading, market abuse, and workplace misconduct.
They said working together with others in the industry is important to make real improvements. This report will help companies in the capital markets get better at stopping financial crimes.
FCA Aims To Strengthen Broker Controls And Enhance Money Laundering Prevention
Since the FCA’s last review in 2019, some progress has been made. Brokers have improved how they check customer risks, handle new customers, and monitor their transactions.
They have also worked better with teams who watch trades and check for any strange activities. But the FCA still found some areas where brokers need to do better to stop money laundering.
The FCA said some companies don’t understand how much money laundering they could be exposed to. They also found that some brokers depend too much on others to check their customers.
Brokers also don’t share enough information with each other. The FCA pointed out that there isn’t enough awareness of suspicious activities related to money laundering in the markets.
Steve Smart, the joint director of enforcement and market oversight, explained that the flow of capital is important for the market to grow. But, he said, money that comes from crime should not be allowed to mix with clean money. For the UK’s financial services industry to grow, people need to trust it.
FCA Wants To Improve Encourage Innovation In Transaction Monitoring
Integrity, or honesty, is very important for trust. Firms are very important in helping to find and stop criminal activities. Steve Smart also said that companies need to keep checking their controls to make sure they work well against financial crimes.
The FCA said it will keep working with firms, industry groups, and the police to better understand and share information about new risks.
They also want companies to be more creative in how they watch transactions and stop criminals. The FCA also published a review on how firms are stopping money mules, which are people who help criminals move illegal money.
The Financial Conduct Authority (FCA) is a regulatory body for financial services in the United Kingdom. It operates independently from the UK Government and funds itself by charging fees to members of the financial services industry.
