As traders work from home, UK regulator calls for sharper scrutiny

FILE PHOTO: A trading screen shows share prices predominantly in red, indicating a fall in values./File Photo/File Photo

LONDON (Reuters) – Financial firms must check if their market surveillance systems can spot suspicious transactions adequately as traders work from home, British regulators said on Wednesday.

Since mid-March, many stock and bond traders have been working from home or back-up sites as offices stand largely empty in central London, staffed by a few “key workers”.

“During this period, we encourage a particular focus on maintaining robust market surveillance and suspicious transaction and order reporting by relevant market participants, in the context of changes in market conditions and the current use of alternative working arrangements,” the Financial Conduct Authority (FCA) said in a bulletin.

Many listed companies are expected to tap stock and bond markets for funds to stay in business as the lockdown tips Britain into a deep recession.

Bankers working from their kitchens or bedrooms may raise new, additional risks around identifying and handling inside information on capital raisings, the watchdog said.

“Given market uncertainties and changed working arrangements, issuers need to be extra vigilant about the possibility of leaks and rumours, and identify whether there has been a breach of confidentiality,” it said.

Common industry controls such as a mandatory two-week holiday for front-office staff may be appropriate, the FCA said.

Reporting by Huw Jones; editing by Jason Neely and Pravin Char

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