Financial Markets Standards Board (“FMSB”) has today published a Statement of Good Practice (“SoGP”) on Unauthorised Trading Frameworks in Transparency Draft for industry consultation and feedback.
The purpose of this publication is to help establish practical foundations for oversight and controls for unauthorised trading as well as more consistent expectations among firms and regulators regarding the broader frameworks needed to effectively contain it.
Background:
The financial services industry has been investing heavily in the design and implementation of risk management frameworks to ensure that activities are conducted within authorised boundaries. This includes avoidance of incidents of unauthorised trading which are a potential source of significant financial loss and reputational damage at industry as well as firm level. Notwithstanding significant efforts, there is a continuing risk that novel or existing vulnerabilities could allow unauthorised trading to occur or remain undetected.
Active cross-jurisdictional regulatory engagement on unauthorised trading has been bilateral, with detailed feedback provided to individual firms. In the absence of comprehensive industry guidance or published expectations, baseline standards for unauthorised trading frameworks have not been advancing consistently across markets or jurisdictions.
Following on from its work on Front Office Supervision, FMSB therefore convened a Working Group to develop an industry-wide framework to support firms in their efforts to prevent or mitigate the risk of unauthorised trading activity in wholesale markets. The SoGP reflects input from across FMSB Members, with both buy-side and sell-side firms contributing. It also benefits from contributions and support from the global regulatory community.
We are grateful to Alison Higgins, Markets Head for UK, Europe, and the Americas and Global Head of Control for Markets at Standard Chartered Bank, for chairing the Working Group and to all those who have contributed so far.
Next Steps
The Transparency Draft SoGP is now open for comments from the wider industry until 15th September 2025. Please address any feedback to secretariat@fmsb.com, making clear that the feedback is related to FMSB’s Transparency Draft SoGP on Unauthorised trading frameworks.
About FMSB:
- Financial Markets Standards Board (FMSB) is an industry-led, member-funded global standards body for the wholesale financial markets.
- Created out of the Fair and Effective Markets Review (FEMR) in 2015, FMSB brings together its Members from banks, investment institutions, infrastructure and information providers, corporates, pension funds and interdealer brokers, to develop Standards, Statements of Good Practice and Spotlight Reviews that raise standards of behaviour, competence and awareness – to promote the fairness and effectiveness of global wholesale financial markets.
- As well as standard setting, subject matter experts from member firms debate issues in working groups and are able to benchmark their approaches against industry peers, thus helping to lift standards of conduct.
- FMSB’s full membership list is here
For more information / media inquiries:
Laura Conaghan
+44 (0)7929 72669
Laura.conaghan@fmsb.com