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FCA Issues Warning Over 'Printing' and 'Flying'

Posted on 29 January 2019

FCA Issues Warning Over 'Printing' and 'Flying'

On 2 November 2018, the FCA repeated concerns (first expressed in June 2015) regarding firms publishing incorrect/misleading volume and price data and the possible market abuse risks associated with this. These practices are known as "flying" and "printing". "Flying" involves a firm communicating to its client or other market participants via screen, instant message, voice or other methods, that it has bids or offers which are not supported by a client order or traders' actual instructions. "Printing" involves the communication by one of those methods that a trade has been executed at a specific price/size, when no actual trade has taken place. The FCA is concerned that other market participants will make trading decisions on the basis of this incorrect information, potentially causing financial harm and undermining the integrity of the markets.  It has noted that this may in principle, result in regulatory enforcement or criminal proceedings for market abuse. 

Firms are expected to take action to prevent such behaviours from taking place. The FCA reports that some firms have changed the way they communicate prices or advertise trades, by making a clear distinction between a real trader's bid and an indicative only one. The FCA further emphasises that firms should have appropriate oversight and systems and controls in place to ensure that the instructions which employees place on trading venues, or share via chat systems and trades which they publicly report, do not give false or misleading impressions to the market. The FCA also reminds individuals of the obligation for an approved person to act with integrity in carrying out his accountable functions as per APER 1 of the Principle and Code of Practice for Approved Persons and for individuals performing an accountable higher management function to exercise due skill, care and diligence in managing the business of the firm for which they are responsible as per APER 6.

Ultimately, all firms are encouraged by the FCA to review the processes and systems they have in place to educate their employees on the risks and nature of such practices as well as to monitor the trading activities in the firm. The firm has overall responsibility to ensure that it investigates any potential breaches and to make appropriate disclosure to the FCA where it has concerns.

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