FCA fines broker £3.44m for misleading clients

The regulator's investigation found that between 2008 and 2015, brokers at TFS-ICAP carried out the practice of ‘printing’ trades. This involved brokers communicating to their clients that a trade had occurred at a particular price and/or quantity when no such trade had actually taken place. TFS-ICAP brokers, across multiple broking desks, did this openly and over a prolonged period.

Printing trades sought to encourage clients to trade when they might not have done, to generate business for TFS-ICAP. As such, TFS-ICAP did not observe proper standards of market conduct.

Furthermore, TFS-ICAP did not react to warning signs that printing might be taking place or act to address the risk of it, and so failed to act with due skill, care and diligence.

Neither were there any records to evidence the practice which, according to the FCA, meant the investigation had to establish the existence of a practice that was opaque and unrecorded in any of TFS-ICAP’s records.

TFS-ICAP also had shortcomings in its oversight and compliance arrangements to detect and counter the risk of brokers providing price or quantity information on the basis that it was based on actual trades when these had not taken place.

TFS-ICAP agreed to resolve this case with the FCA, thereby qualifying for a 30% discount to the overall financial penalty imposed. Without this discount, the FCA would have imposed a financial penalty of £4.92 million.

Mark Steward, executive director of enforcement and market oversight at the FCA, said: "This market should take notice that printing, or providing information to clients where the basis for the information is not true, is not in keeping with appropriate standards of market conduct. The market should also take notice that the opacity of such practices, while forensically challenging, is no bar to action either."