Tuesday 9 July 2019 4:26 pm

Annual fall in suspect share dealing occurring before takeovers, FCA report finds


Chief City reporter covering banking, insurance, deals and exchanges. Email stories to seb.mccarthy@cityam.com

Chief City reporter covering banking, insurance, deals and exchanges. Email stories to seb.mccarthy@cityam.com

Suspect share price movements that occur before takeover announcements and imply insider trading fell to its lowest level in more than a decade last year, the UK’s financial watchdog revealed yesterday.

Roughly one in ten takeovers were linked with unusual share price moves over the course of 2018, according to a “market cleanliness” indicator released by the Financial Conduct Authority (FCA).

Last year’s level of suspicious trades marks the lowest level since 2006 and a sharp improvement from 22 per cent in 2017, when the FCA faced stiff criticism over the issue.

During 2018 some 68 out of 1070 announcements, or 6.4 per cent, saw abnormal increases in trading volumes ahead of them.

The FCA warned that media reports and financial analysis can also influence statistics, and the figures cannot be used to determine whether insider dealing has actually taken place.

“This year we have taken steps to combat the risks of market abuse, including opening 484 preliminary market abuse investigations and a programme of visits to improve monitoring in fixed income, commodity and derivative markets,” said FCA chief executive Andrew Bailey, who is a current frontrunner in the race to be the next Bank of England governor.

In its annual report released yesterday, the FCA also showed that Bailey received a £3,000 pay rise to £592,000 in the year to March 2019, although his performance-related pay slipped by £7,000.

Penalties totalling £227.3m were also handed out over the 12-month period, rising from £69.9m in the previous year.

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