Britain's financial regulatory body, the Financial Conduct Authority (FCA), has joined forces with the country's finance ministry to call for an update to the rules inherited from the European

Union (EU) that govern abuses in financial markets. This move comes after a review of the criminal market-abuse regime that outlines sanctions for insider dealing and manipulative behavior in markets. The review found that several areas needed updating to ensure that regulators could tackle breaches effectively.

The ministry and the FCA issued a joint statement on Friday, saying that the government had committed to reviewing the criminal regime to ensure that the FCA could take appropriate action against market abuse. The statement added that the review had identified several areas where it would be necessary to update the criminal regime.

As part of the Future Regulatory Framework (FRF) review, changes to criminal sanctions will form a part of a wider post-Brexit examination of regulation. The FRF program aims to repeal the Market Abuse Regulation, the civil market abuse regime, and replace it with UK-specific legislation. A timetable for these changes will be set out in due course.

Simon Morris, a financial services partner at law firm CMS, has suggested that the criminal regime should be broadened to include more serious offences. Morris added that most market abuses are civil offences and that more surveillance resources for the FCA and greater collaboration with fraud prosecutors would be far more effective than tinkering with the current rules.

According to Morris, the EU has already criminalized most serious market abuse, and the UK is lagging behind with a 30-year-old regime that is no longer fit for purpose. He also believes that a more proactive approach to surveillance and greater collaboration would yield ten times the results of tinkering with the current rules.

The joint statement from the ministry and the FCA has highlighted the need for greater cooperation between regulators and law enforcement agencies to combat market abuse effectively. It also emphasizes the importance of providing regulators with the tools they need to take appropriate action against abusive behavior.

In conclusion, the FCA and the UK finance ministry are calling for an update to the criminal market-abuse regime inherited from the EU. The move comes after a review identified several areas that need updating to ensure that regulators can tackle breaches effectively. The review has also highlighted the need for greater surveillance resources for the FCA and greater collaboration with law enforcement agencies to combat market abuse effectively. Changes to criminal sanctions will form part of a wider post-Brexit examination of regulation known as the FRF review. Photo by Christoph Scholz, Wikimedia commons.