The FCA fined firms and individuals over £1bn for market integrity breaches last year, new analysis shows.
A report from Kinetic Partners, a division of Duff & Phelps, revealed that a total of £1.23 billion in penalties was handed out in this regulatory area.

This included abusive market behaviour such as: manipulation, insider dealing, FX failings and benchmark (Libor) manipulation.

The annual Global Enforcement Review found that market integrity was the second most cited offense among fines filed by the FCA against either firms or individuals, totalling 10 for the year, behind customer protection, which accounted for 16 fines.

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However, despite fewer actions being taken against market integrity breaches, this classification nevertheless accounted for a greater share of the sum total of fines than any other category of violation during that period. In total the FCA handed down fines of £91.6m for customer protection.

Kinetic Partners also found that fraud/deliberate misconduct accounted for seven of the fines amounting to £1.59 million and compliance failure accounted for seven fines amounting to £149.1 million in penalties.

Monique Melis, managing director and global head of regulatory consulting at Kinetic Partners, said: “Regulators are particularly focused on cases of market integrity and consumer protection, as they face continued pressure from politicians to demonstrate to the public that the industry is moving in the right direction.

“The large fines imposed in these areas of enforcement act as a valuable tool for deterrence.

“Firms’ investment in controls must increasingly reflect this and they should have a robust central monitoring function and compliance system in place to ensure that both the firm and its employees are operating with integrity.”

Simon Appleton, director of regulatory consulting at Kinetic Partners, a division of Duff & Phelps said: “The best way firms can protect themselves against enforcement, other than through prevention techniques, is to identify abuse and report the suspicion before it comes to the regulator’s attention.

“The public expects fair and orderly markets and level playing fields; they expect those operating in the markets and employed by regulated firms to act with integrity and in the consumers’ best interests.

“This means, it is the obligation and burden of those firms and employees to maintain market confidence.”