FX options broker TFS-ICAP fined £3.44 million for falsifying trades

The FCA said TFS ICAP had misled clients in a printing scheme over a prolonged period to encourage them to trade when they otherwise might not have done.  

UK watchdog the Financial Conduct Authority (FCA) has fined FX options interdealer broker TFS-ICAP £3.44 million for misleading institutional clients about trading activity.

Known as printing, the illegal practice aims to encourage clients to trade when they may not have done by misinforming them about executions at a specified price or size that never occurred. 

The FCA said the electronic and voice broker openly engaged in printing over a prolonged period of time so as to generate business for itself and failed to react to warning signs that printing might be taking place. 

A notice on the regulatory action outlined that TFS-ICAP trading desk heads were aware of the illegal printing activity and had themselves printed trades. 

“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,” said Mark Steward, executive director of enforcement and oversight at the FCAS. “The market should also take notice that the opacity of such practices, while forensically challenging, is no bar to action either.”

TFS-ICAP also did not have adequate systems or controls in place to mitigate the risk of printing, the notice stated, while the broker’s governance structure meant that oversight of the broking desks was limited.

The FCA added that TFS-ICAP had agreed to resolve this case with it and had therefore qualified for a 30% discount to the overall financial penalty, the original fine coming to a total of £4.92 million.