On October 30, the UK Financial Services Authority (FSA) published its latest Market Watch newsletter. The newsletter provides an update on market conduct and transaction reporting issues such as unauthorized trading, market abuse controls, technical reporting specifications for reporting derivatives and transaction reporting.
Particularly, the newsletter highlights the FSA’s findings from its continuing work with respect to systems and controls necessary to deter and detect unauthorized trading. Specifically, the FSA has been interested in such things as front office culture and governance, trading mandates and limits, risk management and limits, use of management information, use of off-market rates, attribution of profit and losses, confirmations, margining, collateralization and cash management and the segregation of duties and IT security.
Market Watch 29 also includes feedback from the FSA’s follow-up visits to hedge fund managers on market abuse controls. The feedback addresses firm culture and senior management responsibility, compliance, the control of inside information, monitoring of trading activity, training, personal account dealing and use of telephone taping.