FCA calls attention to continued trade manipulation tactics

British pounds

Financial firms continue to flout rules designed to protect investors from being misled about the true value of financial products, according to a recent bulletin from the U.K.’s Financial Conduct Authority (FCA).

The regulator warned firms that practices such as “flying” and “printing” create “a false impression of a financial instrument’s liquidity and/or price.” Not only does this unethical behavior damage reputations and undermine trust in the market, but it might also mean firms are breaching the U.K.’s Market Abuse Regulation and the Financial Services Act, as well as sections of the FCA’s handbook.

“Flying involves a firm communicating to its clients, or other market participants, via screen, instant message, voice, or other method that it has bids or offers when they are not supported by, or sometimes not even derived from, an order or a trader’s actual instruction,” the FCA’s Jan. 30 market watch report explained. “Printing involves communicating, by one of the above methods, that a trade has been executed at a specified price and/or size, when no such trade has taken place.”

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