The FCA’s Approach to Financial Crime: Market Integrity is Non-Negotiable

In an important powerful address at the Market Abuse and Market Manipulation Summit on April 28, 2025, Therese Chambers, joint executive director of enforcement and market oversight at the Financial Conduct Authority (FCA), laid out the regulator’s comprehensive strategy to maintain market integrity and combat financial crime, including market abuse, through what she terms the “three Ps” approach – being predictable, proportionate, and purposeful.

Crackdown on Organised Crime: No Mercy for Market Abusers

Financial crime is at the forefront of the FCA’s agenda and strategy. In her speech in April, Chambers identified Organised Crime Groups (OCGs) as “the most serious threat to our markets,” revealing they account for approximately 25% of all Suspicious Transaction & Order Reports (STORs). The scale of the problem threatening market integrity is staggering – the FCA has identified over half a billion pounds in OCG profits from suspicious trading since 2022 alone.

As a result, the regulator is taking aggressive action to disrupt these criminal operations, including executing arrests and coordinating with multiple agencies on financial crime both domestically and internationally. This zero-tolerance approach extends beyond OCGs to all forms of market abuse and market manipulation.

Where firms persistently fail in their responsibilities, the FCA won’t hesitate to intervene with decisive action. A recent example is the restrictions imposed on an investment firm, preventing it from onboarding any new customers to its Contracts for Difference (CFD) business without FCA permission due to inadequate systems and controls for identifying and reporting market abuse.

Raising the Bar: Sophisticated Threats Demand Sophisticated Controls

As market abuse techniques evolve in complexity, the FCA is raising expectations for firms’ detection and prevention capabilities. Chambers acknowledged that “those who seek to abuse our markets are becoming more sophisticated. But so are our detection and enforcement capabilities.”

Firms are expected to implement increasingly advanced surveillance systems that can keep pace with emerging threats. The FCA was explicit that adequate systems and controls to identify and report market abuse are “not just a nice-to-have – it’s a fundamental responsibility.”

MiFID transaction reports remain vital to the FCA’s work in identifying and acting against market abuse, providing “a rich and unique view of our markets.” This is particularly important during periods of volatility – Chambers noted that on April 7 alone, 76 million transaction reports were received across asset classes, more than double the daily average of 30 million.

Culture Is Key: Building Market Integrity From Within

A strong anti-market abuse culture within firms forms the bedrock of the FCA’s strategy. The regulator sees firms as “the first line of defence against market abuse,” and recognises that “most firms work very hard to get it right.”

Chambers emphasised that firms should not hesitate to offboard entire corporate relationships if they don’t fit their risk profile. “In fact, this is often the right response when risks are identified,” she stated. This highlights the expectation that maintaining market integrity should be prioritised over commercial interests when necessary.

The value of data combined with collaboration is evident in the FCA’s reliance on Suspicious Transaction & Order Reports (STORs). These reports are described as “invaluable” to the FCA’s work, with over 70% of current market abuse investigations originating from a STOR. Last year alone, the FCA received 4,528 STORs, showing an increasing trend over previous years.

Market Integrity: The Foundation of Economic Growth

One of the most compelling aspects of Chambers’ speech was the direct connection drawn between market integrity and economic prosperity. She emphasised that “cleaner markets instil confidence, which encourages investment into our markets, which encourages growth and innovation. It’s a virtuous cycle.”

The FCA’s 5-year strategy to 2030 includes a dedicated pillar to fighting financial crime, alongside supporting sustained economic growth. Chambers was emphatic that “our work on market abuse is a critical part of all areas of that strategy” and that “market cleanliness and economic growth go hand in hand.”

Innovation Meets Integrity: The PISCES Initiative

In a significant move to balance regulation with growth, the FCA has announced plans for a ‘Private Intermittent Securities and Capital Exchange System’, or PISCES – a new type of stock market for private companies that will allow firms to trade shares on a periodic basis, outside the Market Abuse Regulation (MAR) regime.

This innovative approach is described as a ‘private plus’ mechanism where “transaction reporting will not apply” and “companies will retain more control over aspects of their trading events, such as timing, frequency and participation.” While this represents a lighter regulatory touch to support growth, it’s important to note that the UK’s Criminal Market Manipulation regime will still apply to this market. In addition, MAR would also apply if PISCES shares were admitted to trading to a Multilateral Trading Facility (MTF).

This initiative demonstrates the FCA’s “calculated increase in our risk appetite to support growth” and willingness to “innovate and take more risks.”

Recent Enforcement Success: Day Traders Face Consequences

The FCA’s commitment to enforcement is producing results. As recently highlighted in a LinkedIn post by our Subject Matter Expert for Market Abuse & Surveillance, Simon Appleton, “Wall crossed ‘day traders’ plead guilty to insider dealing,” the regulator is successfully pursuing convictions and confiscating proceeds from illegal activities.

The case raises important questions about how and why ‘professional day traders’ were routinely provided with non-public, price-sensitive information through ‘wall crossings’ – which are typically used to gauge interest from potential investors rather than traders seeking quick profits.

Another recent enforcement action demonstrates the critical importance of industry vigilance. Chambers referenced charges against five individuals for insider dealing offences, including a former analyst at an asset management firm, who allegedly used inside information to enable trading that yielded profits of approximately £1.5 million. This case originated from a STOR that prompted further investigation of trading data.

Looking Ahead: Global Challenges Require Global Solutions

As suspicious behaviour easily crosses borders, Chambers stressed that “close and cooperative relationships with domestic and international regulators and law enforcement agencies are more important than ever.” The FCA is strengthening its international engagement and strategy to address this reality.

The regulator is also expanding its focus across asset classes, having “significantly ramped up our effort and coverage across Fixed Income, Currencies & Commodities (FICC) markets.” A recent example includes an investigation into three bond traders regarding alleged manipulation of Italian government bond futures, resulting in bans and fines.

The message from the FCA is clear: market integrity is non-negotiable. Through their three-pronged approach of being predictable, proportionate, and purposeful, they are determined to create markets that remain hostile to abuse while fostering innovation and growth. As Chambers concluded, “Together, let’s keep building a market that remains hostile to abuse and welcoming to honest participation.”