FCA warns banks and brokers over risks of home working
The financial services watchdog today warned that banks and brokerages are facing increased risks around the handling of sensitive information due to the rise of home working as a result of the coronavirus pandemic.
In its weekly bulletin, the Financial Conduct Authority (FCA) said that “working from home arrangements may raise new, additional risks around identifying and handling inside information”.
In order to protect against misconduct, it added that firms should ensure they have the right controls in place ensure such information is not misused.
If not, it warned, “such misconduct could undermine investors’ confidence and willingness to support companies raising new capital”.
Since mid-March, many bankers and brokers have been working from home as the coronavirus outbreak forced people into an extended bout of home working.
With considerable uncertainty as to when and how such workers will be allowed to return to offices, extra onus has fallen upon firms to keep an eye out for misconduct.
“Given market uncertainties and changed working arrangements, issuers need to be extra vigilant about the possibility of leaks and rumours, and identify whether there has been a breach of confidentiality”, the FCA said.
It added: “During this period, we encourage a particular focus on maintaining robust market surveillance and suspicious transaction and order reporting by relevant market participants”.
In order to ensure standards are upheld, the FCA warned that it might ask participants to demonstrate how they are meeting the requirements.
It also clarified that it would use enforcement measures where necessary.