"As a data-led regulator it is vital that firms submit accurate and timely transaction reports, and promptly bring any failures to our attention."
- Steve Smart, joint executive director of enforcement and market oversight at the FCA
Infinox Capital has been fined £99,200 by the FCA for failing to submit 46,053 transaction reports which risked market abuse going undetected.
The FCA says it needs to receive "complete, accurate and timely transaction reports" to monitor, detect and disrupt market abuse effectively.
Its investigation found that between October 2022 and March 2023, Infinox failed to submit transaction reports for single-stock contracts for difference (CFD) trades executed through one of its corporate brokerage accounts. Trades executed through this corporate brokerage account accounted for the majority of this business line.
Although Infinox identified its failure to submit these transaction reports following a third-party review, it did not proactively report the breach to the FCA. The FCA independently identified this discrepancy in transaction data submitted by Infinox. The FCA says this breach "highlighted weaknesses in Infinox’s transaction reporting systems and controls for a high-risk investment product".
The FCA has fined a number of firms for transaction reporting failures. However, this is the first enforcement action against a firm for a breach of transaction reporting requirements since they became law under the UK Markets in Financial Instruments Regulation (MiFIR).
Article 26(1) MiFIR states that: "Investment firms which execute transactions in financial instruments shall report complete and accurate details of such transactions to the competent authority as quickly as possible, and no later than the close of the following working day."
Steve Smart, joint executive director of enforcement and market oversight at the FCA, commented: "As a data-led regulator it is vital that firms submit accurate and timely transaction reports, and promptly bring any failures to our attention. Infinox failed to do this, which meant market abuse could have flown under the radar and risked the integrity of the market.
"Our specialist teams constantly monitor market data in real time to track any signs of misconduct."
