Suspicious transactions on the rise in the UK after tightened EU regulations


The UK’s financial watchdog, the Financial Conduct Authority (FCA) has revealed a rise in the number of suspicious transactions reported to it.

3,730 such transactions were filed to the FCA in the first nine months of 2017, a 24% rise on the figure for the entirety of 2016 – which was already the highest year on record. A year prior to that, in 2015, only 1,831 reports were made.

Whether this increase is due to an actual rise in financial crime, or because stricter regulations from the EU are creating risk-adverse reporting from the banks, is yet to be discerned. Since the introduction of the Market Abuse Regime in 2016, the FCA has received 77% more reports.

As part of the regime, banks and FIs are required to report a lot more data to the regulator, especially suspicious actions in the system. It also mandates that publicly-traded companies must flag information sooner to avoid spikes or slumps in traded shares.

“It is important to note that the compliance costs in dealing with suspicious transaction reports has grown and the increased costs are also being borne by businesses that have an impeccable record in this area,” Emma Cleveland, managing director at Cleveland & Co, told the Financial Times.

With the incoming MiFID II regulations in January, there will be a definite change in the amount of data which the FCA will have to scrutinise. The figures could well be higher in 2018.

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