Suspected market abuse within a Financial Conduct Authority regulated firm can be reported by both individuals and firms or trading venues to the FCA directly, in order to help keep the financial market a safe space to operate within for all. It is important to understand the correct protocol and processes to follow when reporting market abuse.
Identifying Market Abuse
Market abuse can affect all those involved – from representatives and salespeople, to the end client. It is of critical importance, therefore, when working in a financial sector such as automotive sales, to be aware of market abuse and the correct protocol to take when looking to report market abuse or suspected market abuse.
Market abuse is defined according to UK MAR (Market Abuse Regulation) as insider dealing, unlawful disclosure of inside information, and market manipulation. Once correctly identified, it can be punishable through fines, custodial sentencing of up to ten years, order injunctions, and prohibition of the regulated FCA principal firm or approved persons – a clear reflection of the seriousness of the crime.
It is a priority of the Financial Conduct Authority (FCA) to identify and prevent market abuse within FCA regulated markets wherever possible, in order to keep both financial workers and consumers safe.
How to Report Market Abuse (As a Firm or Trading Venue)
If a firm or trading venue upholds FCA compliance, then it must give staff adequate training to be able to identify suspicious transactions and orders. Once market abuse is highlighted, there are two ways to report this to the FCA.
When looking to report suspected market abuse as a firm or trading venue, a STOR form can be submitted to the Financial Conduct Authority. A Suspicious Transaction and Order Report, otherwise known as a STOR, logs market abuse with the FCA, who can take further action to authorise or disapprove the claim. The FCA is granted this power from the UK MAR in order to do so.
Before submitting a STOR, reasonable grounds for suspicion of market abuse must be identified. If not enough information can be collected for this – for instance, if your firm or trading venue is not directly involved with the suspected market abuse – a market observation can be used to report suspected market abuse.
A market observation can be submitted through the FCA similarly to a STOR, to report market abuse.
How to Report Market Abuse (As an Individual)
There are still ways for individuals who are not part of a firm or trading venue to report market abuse if they suspect it. A report can simply be emailed to the FCA through market.abuse@fca.org.uk including:
- The name of the financial instrument involved
- Company name or people involved
- Dates and times of the suspected transactions
- An explanation for the grounds of suspected market abuse
An anonymous report can also be submitted – also known as whistleblowing – which guarantees confidentiality when reporting market abuse. This may be used by employees of a firm who suspect market abuse within their company.
Does your team know how to report suspected market abuse? Read our previous blog here to find out how your team can remain vigilant.
If you suspect market abuse within your operations, don't hesitate to use the correct protocols and processes to report it. Our software ensures that automotive dealerships maintain a safe and compliant financial environment. Learn more about how we can assist you in navigating these challenges effectively.
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