FCA has published a Thematic Review on its review of inside and confidential information. Its review covered a sample of investment banking firms to assess how they manage the confidential and inside information they receive and generate. It looked mainly at debt capital markets and mergers and acquisitions departments in small and medium sized banks. The review did not test for market abuse including insider dealing or improper disclosure, whether civil or criminal. It found that, although firms recognise the risks associated with flows of confidential and inside information, further work is needed to ensure that these risks are managed appropriately. The review looked at:
- circumstances posing a heightened risk;
- conduct, culture and responsibility; and
- systems and procedures and infrastructure.
FCA has produced a summary of good and poor practices it noted. It has asked some firms involved in the survey to take measures to address shortcomings in their systems and controls, and says the senior management of all firms should consider the results of the review and embed appropriate controls in their organisations. (Source: FCA Publishes Inside and Confidential Information Flow Review)