The Financial Conduct Authority has today fined Citigroup Global Markets Limited £12.5m for failing to properly implement the Market Abuse Regulation (MAR) requirements.

The fine relates to failings in detecting potential market abuse at the London headquartered-operation.  

The watchdog said that by failing to “properly implement” the MAR trade surveillance requirements, Citigroup Global Markets could not effectively monitor its trading activities for certain types of insider dealing and market manipulation. 

The MAR requirements were introduced in 2016 and expanded requirements to detect and report potential market abuse. 

The rules require providers to monitor orders and trades to detect potential and attempted market abuse across a range of markets and financial instruments. 

The failings meant that Citigroup Global Markets breached Article 16(2) of MAR and Principle 2 of the FCA’s Principles for Businesses – that a firm must conduct its business with due skill, care and diligence.  

The FCA found that Citigroup Global Markets failed to properly implement the new requirement when it took effect and then took 18 months to “identify and assess” the specific market abuse risks its business may have been exposed to and which it needed to detect. 

Citigroup Global Markets was found to have significant gaps in its arrangements, systems, and procedures for additional trade surveillance. 

Mark Steward, executive director of enforcement and market oversight, said: “The framework for market integrity depends on the partnership between the FCA and market participants using data to detect suspicious trading. By not fully implementing the new provisions when required, Citigroup Global Markets did not carry its full weight in this partnership, impacting market integrity and the overall detection of market abuse."

Citigroup Global Markets agreed to resolve the case and qualified for a 30% discount. Without the discount, the fine would have been £17.9m.