MAS helps Forex brokers in Singapore to detect market abuse

The Monetary Authority of Singapore (MAS) on Wednesday, has published its inaugural enforcements report that covers its activities between July 2017 and December 2018. 

March 21, 2019. | AtoZ Markets – The financial watchdog, in the report, highlights its priorities and enforcement actions which included nearly S$17 million financial penalties in the 18 months period. The authority said it published this report to build a much stronger public trust.

As part of its efforts to ensure good financial practices in its jurisdiction, MAS focused majorly on brokers’ activities. The authority tried to restrain undesirable trading behavior among brokers before such intensified. By doing this, the MAS was sure to cut down the emerging dangers of malicious trading exercises.  To ensure this, the regulator imposed S$16.8 million in fines and agreements on 42 financial institutions in the same period. In addition, a total of S$698,000 in civil right penalties were sanctioned for one case of unauthorized trading and two cases of insider trading. 

The financial regulators’ effort was meant to build not only the brokers’ conducts but also their culture and help create an environment that is void of misconducts. Over the 18 months, the authority has issued 223 warnings, 37 reprimands, 19 prohibition orders, 223 warnings and 444 supervisory reminders to individuals, companies and financial institutions.

Key areas of enforcement

The regulator has expressed its desire to continue on this path and has identified three key areas of enforcement. The areas include market abuse, financial services misconduct and money-laundering related violations.  

In order to protect and safeguard the public from future market misconducts, the regulator has decided to focus on strengthening brokerages’ internal controls that will help them to recognise and prevent market abuse and misconducts.  In the report, 38% of the 37 outstanding cases of market abuse offences as of the end of last December were based on insider trading. 35% were based on false trading and 27% on corporate disclosure and frauds. MAS reported that there were also 13 outstanding cases of money-laundering controls. The authority said it would continue to enforce anti-money laundering compliance, frown and severely deal with insider trading and enforce accurate and timely information disclosure by brokers and other financial institutions. 

Furthermore, MAS has set up initiatives to beef up its efforts. Among these is the deployment of data analytics to help in monitoring and detecting market manipulations. The regulator has, however, prioritised its enforcement duties to five key areas. This includes the following.

  • Strengthening the timeliness and adequacy of corporate disclosures by listed firms.
  • Business conduct of financial advisers and their representatives.
  • Financial institutions’ compliance with AML/CFT requirements.
  • Brokerage houses’ internal controls to detect and deter market abuse.
  • Surveillance and investigations into suspected insider trading.

Wednesday’s inaugural report will be published every 18 months. The report also revealed the time taken to complete investigations. The agency said it hoped the report will provide greater accountability and transparency that will increase the public’s trust greatly.

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