TR 15/1 review on asset management firms and the risk of market abuse

On 18 February 2015, the FCA published its thematic review on asset management firms and the risk of market abuse (TR15/1).

The paper presents the regulator’s findings from the thematic review of how asset management firms control the risk of committing market abuse. The review considers how firms control the risks of insider dealing, improper disclosure and market manipulation, with a primary focus on equities and insider dealing.

Market abuse causes integral damages to the financial markets and undermines confidence in the financial services system. Association with market abuse can cause reputational damage to firms and can lead to substantial financial loss. The FCA’s regime requires all regulated firms to have effective processes for identifying, monitoring and managing the risks of market abuse.

The review covered 19 asset management firms of various sizes (AUMs ranging from £200m to over £100bn) including long-only asset managers, hedge fund managers and an occupational pension scheme. The overall finding of the review was that firms need to pay more attention to the possibility of receiving inside information through all aspects of the investment process.

Please click below to access our glance card with the key findings of the TR15/1 review along with good and bad practice examples taken from the firms that participated in the review:

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Should you require any further advice or information on the above, Cleveland & Co, your external in-house counsel, are here to help.

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