The company was sanctioned for failures relating to the detection of market abuse
The Financial Conduct Authority (FCA) has fined Citigroup Global Markets Limited £12,553,800 for failing to properly implement the Market Abuse Regulation (MAR) trade surveillance requirements relating to the detection of market abuse.
The FCA said that by failing to properly implement the MAR trade surveillance requirements, Citigroup Global Markets could not effectively monitor its trading activities for certain types of insider dealing and market manipulation.
According to the FCA, Citigroup Global Markets agreed to resolve the case and qualified for a 30% discount. Without this discount, the fine would have been almost £18 million.
MAR was introduced in 2016 and expanded requirements to detect and report potential market abuse. It introduced a requirement to monitor both orders and trades to detect potential and attempted market abuse across a broad range of markets and financial instruments.
However, the regulator found that Citigroup’s international broker-dealer failed to properly implement the new requirement when it took effect, and took 18 months to identify and assess the specific market abuse risks. The FCA stressed that Citigroup Global Markets’ flawed implementation resulted in significant gaps in its arrangements, systems, and procedures for additional trade surveillance.
“The framework for market integrity depends on the partnership between the FCA and market participants using data to detect suspicious trading,” Mark Steward, executive director of enforcement and market oversight at the Financial Conduct Authority, commented. “By not fully implementing the new provisions when required, Citigroup Global Markets did not carry its full weight in this partnership, impacting market integrity and the overall detection of market abuse.”
