Firms that could do so had a market abuse risk assessment which documented that they had considered different market abuse risks. ![]() ![]() However, not all firms could demonstrate they had considered all market abuse risks relevant to their business. Firms should also read Market Watch 73 alongside our December 2022 portfolio letter: Our Contracts for Difference (CFD) Strategy.Īll firms recognised insider dealing in single stock equities as the predominant market abuse risk. While this article draws specific observations from our CFD peer review, the themes of that edition are equally relevant. You should read this edition in conjunction with Market Watch 69. Given these risks, our review aimed to improve our understanding of CFD providers’ arrangements to identify and report potential market abuse and raise standards. ![]() We are also aware of a potential increase in a type of manipulative behaviour where spread bets and CFDs are being used to realise profits following manipulative practices in the underlying market via other firms. They are a major source of Suspicious Transaction and Order Reports (‘STORs’). In this Market Watch, we discuss our observations and findings from our recent market abuse peer review into firms that offer Contracts for Difference ('CFDs') and spread bets (‘CFD providers’).ĬFDs and spread bets are particularly vulnerable to being used for insider dealing due to the speculative and leveraged nature of the products.
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