The Financial Conduct Authority (FCA) announced today that it has fined an FX options broker, TFS-ICAP £3.44 million for market misconduct. The broker communicated false information to clients related to trade execution.
The official press release mentioned that between 2008 and 2015, brokers at the financial firm informed clients that trade had occurred at a specific price or volume, despite the fact that no such trade had actually taken place. The company carried out the practice known as ‘printing’ trades.
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The FCA outlined the shortcomings in the compliance arrangements of the firm as they failed to detect the risks associated with such practices. The company did not maintain the record as well and the authority had to conduct extensive research to find the evidence.
“This market should take notice that printing, or providing information to clients where the basis for the information is not true, is not in keeping with appropriate standards of market conduct. The market should also take notice that the opacity of such practices, while forensically challenging, is no bar to action either,” Mark Steward, Executive Director of Enforcement and Market Oversight at FCA, said in a statement.
Assistance by CFTC
In a special note to Commodity Futures Trading Commission (CFTC) in the United States, the FCA expressed gratefulness for the constant support and assistance provided by the CFTC in the mentioned investigation. The FCA also mentioned the discount that TFS-ICAP availed because of the cooperation to resolve this case. “TFS-ICAP agreed to resolve this case with the FCA, thereby qualifying for a 30% discount to the overall financial penalty imposed. Without this discount, the FCA would have imposed a financial penalty of £4.92 million,” the authority said in the press release.