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Brit Banking Regulator: Market ‘Cleaner,’ Insider Trading Down

Bruce Carton | July 3, 2015

In the Annual Report and Accounts 2014/15 for the Financial Conduct Authority, the UK's financial regulator stated that its most recent statistics for "market cleanliness" continue to show a "significant decline in the incidence of potential insider trading cases" since 2009. The FCA calculates market cleanliness by looking at

the proportion of potential insider trading cases, measured on the basis of abnormal price movements observed before takeover announcements of publicly traded companies, relative to the sum of all takeovers in a given period. 

As the chart below from the FCA's Annual Report shows, market cleanliness in the UK has improved dramatically since the 2006-2009 period, when 30% or more of takeover announcements were preceded by abnormal price movements that suggest insider trading:

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