Central Bank of Ireland: Dear Chairperson Letter on Trading Venue Compliance with Requirements under MARAugust 2023
The CBI has published a letter, dated 26th July 2023 addressed to trading venue operators, outlining the findings of the CBI’s thematic inspection of operators’ market surveillance arrangements and their compliance with the Market Abuse Regulation (“MAR”).
The inspection identified several failings concerning the effectiveness of market surveillance arrangements:
- Governance, MI Reporting and Training: Boards, Senior Management Teams and Second Line of Defence were unable to demonstrate the necessary level of understanding, accountability and ownership with regards to surveillance systems. MI was not sufficiently detailed to evidence adequate escalation of issues and specific surveillance training was not provided in a formal basis to all staff, including Board members.
- Prevention, Detection and Assurance: Trading Venues do not have sufficiently effective procedures, systems and staff in place to effectively prevent, monitor, detect and identify market abuse issues. Gaps were identified to relation to real time surveillance, resources, and controls.
- Suspicious Transaction Order Reports (“STORs”): The number of STORs received by the CBI from Trading Venues have decreased substantially since 2018. This does not reflect the quantity of transactions has increased and the number of overall STPRs received by the CBI has increased. Issues identified during the inspection include Compliance officers having no formal role in relation to the production and review of STORs and no internally set deadlines to ensure timely STOR submission.
The CBI requires that the Chairpersons take responsibility for the findings in the letter, ensuring that it is discussed, minuted, and actioned. The CBI requires trading venues to immediately commence a review of the trade surveillance arrangements.
The full letter can be read HERE