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Rapid Response Team: 0800 559 3500
Switchboard: +44 (0)203 947 1539
Rapid Response Team: 0800 559 3500
Switchboard: +44 (0)203 947 1539

Printing trades and the FCA

Author: Nicola Sharp  3 December 2020
4 min read

After an options broker was fined millions for printing trades, Nicola Sharp of Rahman Ravelli examines the Financial Conduct Authority’s approach to the practice.

On Monday 23 November 2020, the FX options broker TFS-ICAP Ltd was fined £3.44 million by the UK’s Financial Conduct Authority (FCA) for a practice called printing trades. 

The regulator found that TFS-ICAP had communicated misleading information to clients to encourage them to trade when they may not otherwise have done, thereby undermining the integrity of the market. TFS-ICAP brokers did this openly and over a prolonged period of time across numerous broking desks.

Brokers and the FX options market

The FX options market is a global market where participants have global and continuous requirements for liquidity. Brokers have an important role in this market as they source liquidity and prices and bring together buyers and sellers in financial instruments.

A central role of FX options brokers is to provide timely information to clients in relation to prices and trades. The data provided by brokers helps clients make informed trading decisions. Conduct by brokers that leads to misleading information being disseminated creates a risk of clients taking into account this information when making their trading decisions, which amounts to market misconduct.

Printing trades and flying prices

Printing involves a firm communicating to clients that a trade has been executed at a specified price and/or size, when no such trade has taken place. Flying prices involves a firm communicating to its clients that it has bids or offers, even if this is not supported by an order or a client’s actual instruction.

The purpose of these practices is to generate business by encouraging trades to take place that might not otherwise have happened. For example, it may be used as a way to boost the chances of a trade taking place when two clients are close on a price but not willing to meet: these practices can motivate parties to react and prompt them to place trades that are being deliberated on. One other reason why brokers may engage in these practices is the personal remuneration they stand to gain. Depending on the brokerage, the volume of business a broker generates can be a factor when calculating that individual’s overall pay. This was the case at TFS-ICAP.

Relevant regulatory provisions

Generally, the FCA takes the view that these practices could amount to criminal offences, market abuse and/or unacceptable market conduct in breach of its Principles for Businesses. 

The Principles for Businesses are a general statement of the fundamental obligations expected of firms under the regulatory system. They derive their authority from the Financial Services and Markets Act 2000 (FSMA).

In this case, TFS-ICAP was found to have breached Principles 2, 3 and 5:

  • Principle 2 provides that a firm must conduct its business with due skill, care and diligence.
  • Principle 3 provides that a firm must take reasonable care to organise and control its affairs responsibly and effectively, with adequate risk management systems.
  • Principle 5 provides that a firm must observe proper standards of market conduct.

The FCA imposed the fine pursuant to section 206(1) of FSMA, which states: “If the Authority considers that an authorised person has contravened a requirement imposed on him by or under this Act, it may impose on him a penalty, in respect of the contravention, of such amount as it considers appropriate.’’

TFS-ICAP’s failings

According to the FCA, brokers at TFS-ICAP considered printing to be market practice - a practice that was widespread from 2008 to 2015. In addition to breaching market conduct regulations, TFS-ICAP was also found not to have adequate systems or controls in place to mitigate the risk of printing. Whilst a governance structure for the brokers existed at TFS-ICAP, oversight of the broking desks was limited; which made it inadequate and ineffective.

Following the financial penalty, TFS-ICAP commissioned an external review of its compliance controls framework. This framework is now subject to scrutiny by an independent monitor. This involves testing communications and trading data, reviewing policies and procedures and interviewing individuals regularly, in order to prevent such practices reoccurring.TFS-ICAP agreed to resolve their failings with the FCA, meaning it qualified for a 30% discount on the overall financial penalty imposed. Without this discount, the FCA would have imposed a financial penalty of £4.91 million.

US and UK co-operation

The FCA expressed its gratitude to the US Commodity Futures Trading Commission (CFTC) for its support and assistance in this investigation. The case demonstrates the interplay between the two nations when tackling market abuse.

In 2015, the New York Attorney General sent subpoenas for records to interdealer brokers, including TFS-ICAP. This was part of an investigation into potential manipulation in the currency market using spoofing - the practice of showing or ‘printing’ fake trades to the market - in an effort to persuade New York traders to buy and sell options via TFS-ICAP, rather than through competitors. 

TFS-ICAP and a US affiliate pleaded guilty in 2018 to one count each of securities fraud and agreed to remove two high-level managers from supervisory roles and pay a $1.15 million fine. Whilst the US criminal proceedings have drawn to a close, the CFTC has filed a claim against the ICAP companies for similar offences of flying prices and printing trades. These proceedings remain ongoing.

Advice for FSMA-regulated firms

If a firm identifies areas of concern regarding market misconduct, it needs to:

  • Consider the FCA’s guidance in respect of printing trades and flying prices.
  • Assess the processes that it has in place for training and informing staff about the abusive nature of these practices.
  • Review the degree to which the firm can monitor trading platforms and communication systems to identify instances of printing and flying.
  • Inform the FCA if such practices are identified and co-operate with any resulting investigation, as this may reduce the overall financial penalty imposed.
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Nicola Sharp


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Nicola is known for her fraud, civil recovery, arbitration and business crime expertise, her experience of leading the largest financial disputes and multinational investigations and her skills in devising preventative measures and conducting internal investigations for corporates.

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