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FCA Suspicious Transaction & Order Reports (STORs)

FCA Publishes STORs Statistics for 2019

16th March 2020

At the end of last month the FCA published its Suspicious Transaction and Order Reports (STORs) for the year ending 2019.

Within the report, the regulator notes that the figures for 2019 show the first decrease in the total number of reports since 2016, however, the number of commodity and fixed income STORs have continued to rise.

As regulated firms will know, under the Market Abuse Regime (MAR) that came into force in 2016, both firms and trading venues are required to submit reports to the regulator on any potentially harmful trading activity - such as that of insider dealing or market manipulation.

The total STORs for 2019 numbered at 5,455 which is down 8% from 2018 when a total of 5,926 STORs were reported.

Of these, 4,842 from the Equity sector, 397 from Fixed Income, 140 from Commodities and 76 from Foreign Exchange.

Whilst the vast majority related to Insider Dealing -a whopping 4,623 - the remainder related to Market Manipulation (822) and to ‘Other’ (10).

In contrast to the statistics published by the FCA, the statistics from the European Securities and Markets Authority (ESMA), published in December, showed that the number of STORs reported by firms across Europe had surged 130% in comparison to the number of reports submitted during the last 12 months of the previous Market Abuse Directive (MAD) - the predecessor to MAR – when less than 5,000 reports had been submitted.

The UK Regulator has put the decline in STORs for 2019 down to having issued new Financial Crime Guidance for firms in December 2018 that outlines how firms can take more robust measures towards improving trading supervision, stating:

“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,” FCA February 2020

In addition, the FCA added:

“We believe these restrictions have resulted in less suspicious activity being facilitated by these firms, and consequently a reduction in STORs.” FCA February 2020

The FCA noted that the quality of the STORs had also improved and they are continuing to encourage firms to develop surveillance capabilities with regards to their market abuse detection capabilities.

Read our latest articles, news and views affecting compliance and regulation in the UK Financial Services Industry.