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FCA Fine TFS-ICAP £3.4m for "printing"

Posted on 23 November 2020

The FCA has fined inter-dealer broker TFS-ICAP ("ICAP") £3.4m in respect of deliberately misleading information provided to clients between 1 January 2008 and 31 December 2015 (the "Relevant Period"). (This was the reduced figure after applying the 30% early settlement discount to the figure of £4.9m). The FCA investigation determined that the practice of "printing" (see below) was widespread, conducted openly and very much considered by the brokers to be part of their job. ICAP was found by the FCA to have breached Principles 2 (due, skill care and diligence), 3 (responsible organisation and control of affairs and risk management) and 5 (proper standards of market conduct) of the FCA's Principles for Businesses.


ICAP operates as an inter-dealer broker for institutional clients in the international FX options markets. The FCA found that a central role of ICAP's FX brokers was to provide information to clients to assist them to make trading decisions. The FCA found that the "essence" of broking was the timely provision of information and that clients were entitled to rely upon that. ICAP was a significant player in the UK FX options market, a fact that made the information provided by its brokers significant in the balance of information available to the UK market as a whole. However, during the Relevant Period, ICAP FX brokers gave clients information that trades had taken place and at certain prices and volumes, when no such trades had taken place at all (a practice known as "printing").    

Facilitating this practice, the FCA found that during the Relevant Period ICAP did not have its own dedicated compliance function. Instead, compliance services were provided by a third party, who was largely disengaged from the brokers. There was also a lack of dedicated Senior Management oversight of the business – for example no committees mediated between the broking desks and the Board, who in any event sometimes met only annually and did not address any conduct related matters.


The FCA found that the practice of printing was widespread at ICAP and indeed, amongst some, was seen very much as part of the job of being a broker. For example, brokers told the FCA that they might use printing to encourage counterparties to trade when they were close on a price but not able to strike a deal. This same broker also described the practice as "trying to you know grease the wheels of motion". The FCA found that on occasion ICAP brokers would be asked by clients to print, where it might be beneficial to them for other clients to be provided with misleading information.

Printing took two primary forms. First, brokers might communicate details of fictitious trades to clients directly. For example, in the Final Notice the FCA provides specific examples of instant messages to clients. Second, ICAP had its own proprietary electronic trading platform ("Volbroker"). ICAP clients and ICAP brokers had access to Volbroker and clients could see trades executed on it. ICAP brokers would use Volbroker to enter fictitious trades (to be seen by a client/clients) and then cancel them before execution.

Whilst the practice of printing was widespread and known about at desk level, the FCA found no evidence that ICAP Senior Management were aware of the practice during the Relevant Period. However, the FCA concluded that Senior Management should have known of the practice. In particular, an allegation of printing arising in a foreign affiliate office earlier in 2015 should, the FCA concluded, have prompted a wider investigation of whether the practice was conducted in the UK. Indeed, the fact that it was, was specifically flagged to a UK Senior Manager at a social event by a broker under investigation in respect of the affiliate office allegations. Despite all this, ICAP compliance had neither knowledge of nor input into how the allegations were handled and, as such, did not consider printing to be an issue for the business. All that resulted from this episode was an informal, un-recorded, oral instruction to brokers not to print.

Compliance failures

As above, during the Relevant Period, ICAP did not have its own compliance function. Compliance was unaware that printing was taking place and had no involvement in the allegations made earlier in 2015. The compliance materials and training provided to ICAP brokers were generic and did not specifically deal with printing. On a day to day basis, whilst there was compliance monitoring of broking activity, including on Volbroker, this was focussed on the risk of market abuse rather than printing. The FCA found that the brokers were effectively insulated from compliance, who did not have proper oversight over them, nor were there clear means of brokers escalating concerns to compliance.

Proactive steps and mitigation since the end of the Relevant Period

The FCA noted that since the Relevant Period, the composition of the ICAP board had changed and a desk head had left the business. ICAP also commissioned an external review of its compliance controls and in 2018 appointed an Independent Monitor to conduct on-going regular testing on communications and trade data. The Independent Monitor has found no subsequent instances of printing.


It is worth noting that, although the conduct concluded nearly 5 years ago (having started long beforehand), it is only now the subject of an FCA Notice. It is not possible to know whether this reflects the slow pace of FCA Enforcement, the delay before Enforcement became aware of the relevant matters, or a combination of these and other factors. Whatever is the case, the impact of Final Notices upon the sector must surely be lessened where the conduct is very historic and/or relates to practices or even technology that may no longer be current.

We covered in the last edition of Enforcement Watch an instance of proactive steps taken by a firm (in particular a voluntary redress scheme) having a very dramatic impact on sanction, see Enforcement Watch 32 'FCA Takes the Unusual Step of a Public Censure in a Market Abuse Case'. Interestingly, in the case of ICAP, its admittedly less costly proactive steps seem to have had little direct impact on the calculation of the penalty. When applying the five-step approach for the calculation of penalties (set out in DEPP), the FCA determined that the misconduct was at level 4 in terms of seriousness but reduced the stage 2 figure of £18.3m to £3.6m. It did so simply on the basis that a penalty of £18.3m was disproportionate for the breach concerned, rather than because the proactive steps were a mitigating factor. But, to some, the fact that the penalty was reduced by a factor of 5, will seem surprising given the extent of the wrongdoing. However, it must be remembered there was no attribution of deliberate wrongdoing to ICAP. It seems likely that cases will follow in respect of individuals.

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