A smarter approach to preventing market abuse

The FCA’s 2025-2030 strategy signals a bold shift toward tech-driven, collaborative oversight. With a focus on becoming a smarter regulator, fighting financial crime, and enabling growth, the strategy places market abuse prevention at the heart of its agenda. From using AI to detect misconduct to promoting earlier, more open engagement with firms, the FCA is walking the walk on modernising surveillance and compliance, setting clear expectations for firms to do the same.

A recent speech by Therese Chambers, joint executive director of enforcement and market oversight, reinforces the FCA’s renewed approach to tackling market abuse. Framed through the lens of “Three Ps” — predictable, proportionate, and purposeful — the regulator aims to improve market cleanliness and boost economic growth by engaging earlier, communicating more clearly, and focusing its energy where it can have the most impact.

Predictable

The FCA is sharpening its communications to focus on what truly matters to firms, aiming to deliver predictability through clarity, consistency, and relevance. By streamlining messages and prioritising transparency around its decisions and expectations, the regulator is helping firms act early to prevent market abuse. The FCA reinforced the importance of communications such as their MarketWatch series and Primary Market Bulletins, which serve as channels for sharing enforcement activity, priorities and learnings.

Proportionate

The FCA’s focus on proportionality is simple in principle: remove duplication, ask only for the data that’s truly needed, and ease the regulatory load where possible. However, lowering the volume of data requests does not mean reduced regulatory scrutiny — it means a greater focus on the data that is submitted.

This means the burden shifts, in part, back to the regulator. With fewer data points, the FCA has to get smarter in how it uses what it receives. That’s a good thing. The speech made clear that the regulator is ready to hold itself to higher standards by improving internal analytics and refining how it monitors markets, particularly in volatile conditions.

At the same time, the FCA is signalling a greater appetite for calculated risk. A prime example is its plan for a new market model: the Private Intermittent Securities and Capital Exchange System, or PISCES. Designed as a “private plus” venue, PISCES would allow private companies to trade shares periodically, outside the full scope of the Market Abuse Regulation. This isn’t a public market in disguise, it’s a targeted innovation to support growth, where transaction reporting won’t apply and disclosures will be limited to eligible investors. It reflects a shift in mindset: when regulation becomes more proportionate, it can also become more agile, supporting innovation without losing sight of integrity.

Purposeful

Being purposeful means the FCA is pursuing outcomes that matter. The regulator wants firms to know that market abuse controls aren’t optional extras; they are fundamental responsibilities. If a firm persistently falls short, the FCA will step in, as seen in recent restrictions placed on Dinosaur Merchant Bank.

Purposeful supervision also means knowing when to escalate and when to disrupt early. The FCA is using increasingly sophisticated tools to detect misconduct before it causes real harm and is willing to take alternative enforcement action when full investigations aren’t practical. This could mean tipping off employers, engaging with international regulators, or suspending listings to prevent damage before it’s done.

The expectation is clear: firms are the first line of defence, and that often requires difficult decisions. Offboarding clients that don’t align with a firm’s risk profile isn’t an overreaction — it’s a necessary step to protect market integrity.

At the heart of this approach is data. The FCA relies heavily on STORs, which triggered over 70% of its current investigations. A recent insider dealing case — involving alleged illicit gains of £1.5 million — started with one. The system works best when firms engage early and fully.

The FCA acknowledges that prosecuting insider dealing is particularly difficult. But they remain undeterred. Its purpose is to create a hostile environment for bad actors, and it expects firms to share that mission.

Strategic priorities in tackling market abuse

The FCA’s “Three Ps” are backed by a clear set of strategic priorities, a tactical playbook of sorts, aimed at strengthening the UK’s defences against market abuse. These priorities reflect the evolving complexity of criminal activity and the need for faster, more collaborative enforcement across borders and markets.

Disrupting Organised Crime Groups (OCGs)

Top of the list is the growing threat posed by OCGs. These are sophisticated operations, often with insider access, accounting for a quarter of all STORs. Since 2022, suspected insider dealing by OCGs is estimated to have generated more than £500 million in illicit profits.

The FCA is leaning on the full weight of its toolkit, including targeted arrests, intelligence-sharing, and cross-agency coordination, to disrupt these groups before they cause lasting harm.

Responding to strategic leaks and unlawful disclosure

Leaks are another high-stakes concern, particularly around mergers and acquisitions. When price-sensitive information surfaces in the press ahead of a deal, it damages market fairness and investor confidence. The FCA, alongside the Takeover Panel, is stepping up its oversight here, including direct engagement with investment banks, to tackle leaks at the source and encourage better control frameworks around sensitive events.

Expanding focus across FICC markets

While equity markets often get the spotlight, the FCA is ramping up scrutiny across fixed income, currencies, and commodities (FICC). Recent enforcement action involving alleged manipulation of Italian bond futures is a signal that non-equity markets are firmly on the radar. Firms operating in these spaces should expect greater attention to managing conduct risk, even in more complex or less transparent environments.

Strengthening international cooperation

Market abuse doesn’t respect borders. Whether insider trading or manipulation, the most serious threats often involve cross-border activity. That’s why the FCA is doubling down on international coordination, working closely with overseas regulators and law enforcement to share intelligence, build cases, and close enforcement gaps. Market integrity is a global effort, and the FCA wants UK firms to see themselves as part of that broader defence.

Aligning with the FCA’s vision

The FCA is setting a new pace in market abuse prevention — faster, smarter, and more focused on outcomes. Meeting those expectations means acting early, using the right tools, and staying ahead of emerging risks. That’s exactly where eflow fits in. From surfacing suspicious activity to streamlining STORs, eflow gives firms the clarity and control to stay compliant and become more proactive. In a market where timing is everything, that’s a tangible strategic advantage.

For more information on eflow’s trade surveillance technology, click here or get in touch with the team to organise a personalised consultation.