FCA News

FCA publishes the number of STORs received in 2019

The STOR regime requires market participants to identify and report suspicions of potential market abuse to the FCA. High quality STORs are an important intelligence source for us and assist our identification of harm in financial markets.

Since 2016, we had seen an annual increase in the number of STORs from market participants, however figures for 2019 show the first decrease in the total number of reports. There may be several reasons for the decrease, including the fact that we have observed some firms taking more robust steps to tackle financial crime risks following the publication of chapter 8 of the Financial Crime Guide in December 2018 and our associated supervisory activity. We highlighted firms’ obligations to counter the risk of being used to further financial crime, including the criminal offences of insider dealing and market manipulation. The steps taken by some firms, since then, include reviewing the suitability of clients whose trading may otherwise have been subject of a STOR and restricting their access to financial markets where appropriate. We believe these restrictions have resulted in less suspicious activity being facilitated by these firms, and consequently a reduction in STORs.

The 2019 figures also show the number of commodity and fixed income STORs have continued to rise. This reflects steps taken by firms to improve their detection capabilities and we encourage firms to continue developing surveillance capabilities in this area. The overall quality of STORs continues to improve every year.

We have also seen an increase in the number of market observations received. We launched the Market Observation form in 2019, having recognised that firms often want to submit information about market activity they have observed which is not necessarily appropriate as a STOR. Market observations provide us with valuable intelligence and we encourage their submission where a STOR is not appropriate.

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