FCA warns Interactive Brokers (UK) Ltd over alleged business principles breach
The warning notice is not the final decision of the UK financial regulator. Interactive Brokers (UK) Ltd has the right to provide information to the Regulatory Decisions Committee (RDC) that will decide on an action.
The UK Financial Conduct Authority (FCA) has earlier today announced that it had issued a warning notice to Interactive Brokers (UK) Ltd (IBUK).
In its announcement, which comes more than two weeks after the notice was issued to the broker, the FCA says that it proposes that the company takes action in order to tackle certain aspects of its conduct.
In particular, the FCA states that it believes that in the period from February 6, 2014 to February 28, 2015 (the Relevant Period) IBUK breached Principle 3 of the FCA’s Principles for Businesses. The latter is named “Management and Control” and states that “A firm must take reasonable care to organise and conrol its affairs responsibly and effectively, with adequate risk management systems.” The FCA alleges that in the relevant period, IBUK failed to take reasonable care to organise and control its affairs responsibly and effectively with adequate risk management systems in relation to the identification and reporting of possible market abuse by its customers.
The FCA considers that as a result IBUK failed on three separate occasions to identify and report to the regulator transactions which suspected to be market abuse in the form of insider dealing.
The FCA notes, however, that it does not consider that IBUK’s senior management or other staff were aware that its systems and controls fell short of required standards until an FCA visit to IBUK in December 2014.
The UK financial regulator adds that a warning notice does not represent its final decision. IBUK has the right to make representations to the Regulatory Decisions Committee (RDC) which will in its turn decide on any appropriate action and whether to publish a decision notice. In case a decision notice is issued, IBUK has the right to refer the matter to the Upper Tribunal which would reach an independent decision on the appropriate action for the FCA to take, if any.
If either the RDC or the Upper Tribunal decides that no further action should be taken, the FCA will publish a notice of discontinuance given it has IBUK’s approval.