Sunday, November 1, 2020

Bank of England audio feed illegally accessed by HSBC and JPMorgan traders – FT

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Traders at HSBC Holdings Plc and JPMorgan Chase & Co. are among those who accessed a high-speed audio feed of Bank of England press conferences, according to the Financial Times, which cited an unidentified person.

HSBC and JPMorgan declined to comment to Bloomberg News. Investment banks across the City are trying to establish whether their traders used the feed, which is subject to a probe by the U.K.’s financial regulator, the FT reported.

The probe is considering whether the faster audio, a backup feed of the Q&A sessions hosted by BOE Governor Mark Carney and accessed by a third-party supplier, could have given traders an unfair advantage. Carney’s words can move the price of the pound or U.K. gilts, and even a few seconds of time delay can be enough to get a trade in ahead of a market move.

The audio breach, first reported by the Times of London on Thursday, has been embarrassing for the BOE, as central bank announcements are among the most market-sensitive of any news releases. Major monetary authorities employ tight arrangements for how their information is released.

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In another development, Livesquawk, one of the companies that sells fast audio feeds to traders, attended a BOE press conference in 2016 and asked Carney a question, having the day before encouraged traders to send in their questions over Twitter, the Times reported. Livesquawk denies any wrongdoing.

The Financial Conduct Authority, which oversees insider-trading probes, will likely investigate whether trading occurred based on the early information from the feed. It could also look at whether the audio provider broke market abuse rules by disseminating the information.

The Times of London on Thursday named the third-party contractor as Encoded Media, a British firm which shares directors with news service provider Statisma, according to the Companies House registry. The news broke a day before Andrew Bailey, the head of the FCA, was chosen to replace Carney as BOE governor.

Statisma can deliver feeds as much as 10 seconds faster than TV channels including Bloomberg, according to a website for a company that describes Statisma as one of its partners.

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Statisma said on its own website it doesn’t release information “without it first being made available to the public.” It said: “It is impossible to ‘hack’ or ‘eavesdrop’ any live public event or press conference. Any such suggestion is dismissed out of hand.”

Source: Bloomberg

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