FCA Market Watch 66 - Market conduct and transaction reporting issues

On January 11, the FCA published its 66th Market Watch Newsletter, looking at market conduct and transaction reporting issues.

The newsletter highlights the need for firms to record telephone conversations and electronic communications when alternative working arrangements are in place, such as remote or home working.

In the newsletter, the FCA emphasises the key risks of reduced monitoring, the recording obligations authorised firms are subject to, and what this means for firms in terms of policies and training.

  • Risk of reduced monitoring

    Increased homeworking means misconduct may be heightened or increased. FCA expects firms to continue to comply with the recording obligations in their Senior Management Arrangements, Systems and Controls sourcebook (SYSC 10A). Firms need to ensure that all the activities are recorded and auditable.

  • Recording obligations 
    Firms need to record all the conversations and communications made with, sent from, or received on, equipment provided or permitted to be used for business purposes. These recording obligations may include internal conversations concerning in-scope activities.

  • What this means for firms
    Businesses need to be able to demonstrate to the FCA that their policies, procedures and oversight meet the recording rules. If new technologies or amended policies are introduced, FCA expect firms to provide enhanced or refreshed training to staff covering any conduct risks.

 

"Without effective recording and monitoring controls, there is a real risk of loss of monitoring and surveillance capability, and the absence of protection through loss of evidence to resolve disputes between a firm and its clients over transaction terms."

FCA Market Watch Newsletter, No 66, January 2021


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