Between 2008 and 2015, brokers at TFS-ICAP communicated to their clients that a trade had occurred at a particular price and/or quantity when no trade had taken place. Brokers across multiple desks were found to have done this openly over a prolonged period.
This behaviour encouraged clients to trade when they may not have done, to generate business for the broker.
The broker also did not react to “warning signs” that this behaviour, known as printing, was taking place or act to address the risk of it. As a result, the regulator said it “failed to act with due skill, care and diligence.”
The regulator also found that TFS-ICAP also had shortcomings in its oversight and compliance arrangements to detect and counter the risk of brokers providing price or quantity information on the basis that it was based on actual trades when these had not taken place.
Mark Steward, executive director of enforcement and market oversight, said: “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. The market should also take notice that the opacity of such practices, while forensically challenging, is no bar to action either.”
TFS-ICAP agreed to settle the case with the FCA, so received a 30% discount to the overall financial penalty imposed. Without this discount, the FCA would have imposed a financial penalty of £4.92m.