Wednesday, April 14, 2021

UK watchdog fines FX broker TFS-ICAP for reporting fake trades to customers


Britain’s financial regulator on Monday fined currency options broker TFS-ICAP 3.44 million pounds ($4.6 million) for routinely reporting fake trades to customers for over seven years.

The Financial Conduct Authority (FCA) said that between 2008 and 2015, brokers at the firm were telling customers that a trade had occurred at a particular price or quantity when no such trade had actually taken place, a practice known as “printing”.

“Brokers saw printing as being part of the role and one that ‘everyone was doing’,” the FCA said.

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“It took place openly on desks, with the motivation of generating business for the firm.”

Printing trades could generate additional revenue and in turn boost pay of brokers, the regulator said.

TFS-ICAP was not able to comment immediately.

The fine, following an investigation that also involved regulators from the United States, would have been five million pounds had TFS-ICAP not agreed to resolve the case, the FCA said.

“The FCA is grateful for the assistance provided by the Commodity Futures Trading Commission in the United States in this investigation,” the watchdog said in a statement.

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Since 2018, a senior manager and desk head have left TFS-ICAP, and the composition of its board has changed, the FCA said.

An independent monitor appointed in 2018 has reported no instances of printing.

“This market should take notice that printing, or providing information to clients where the basis for the information is not true, is not in keeping with appropriate standards of market conduct,” said Mark Steward, the FCA’s executive director of enforcement and market oversight.

($1 = 0.7484 pounds)


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