The UK Financial Conduct Authority expressed concern that, in connection with a thematic review of 12 commodities brokers and trading firms, some firms evidenced “complacency” towards the risk of market abuse and weakness in intraday risk monitoring. Many firms also could not demonstrate “effective” procedures to identify and report suspicious transactions. According to FCA, “[w]e are concerned that some firms believe commodity markets are ‘too deep, too liquid, and there are too many participants’ to be manipulated.” The FCA condemned this conclusion as “misguided” and “surprising" in light of recent cases of manipulation in other deep and liquid markets (e.g., in LIBOR, foreign exchange and gold). Besides finding few firms with adequate intraday risk monitoring, FCA also concluded that “[c]redit risk was usually assessed but left un-hedged,” while “[m]arket risk was usually given consideration, but on a portfolio basis little attention was paid to concentration risk which, in the event of stressed market conditions, could result in large financial pressures and liquidity risks.” (Click here for an additional perspective on FCA's thematic review in the article, "FCA Publishes New Market Watch Focusing on Commodities Traders and Market Abuse" in the September 11, 2015 edition of Corporate & Financial Weekly Digest by Katten Muchin Rosenman LLP.)