FCA Market Watch 75 – Doubling down on insider dealing and unlawful disclosure | Fieldfisher
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FCA Market Watch 75 – Doubling down on insider dealing and unlawful disclosure


United Kingdom

The Financial Conduct authority has issued a stern reminder to Disclosing Market Participants (DMPs) about the risks of unlawfully disclosing information that may lead to insider dealing.

On 31 October 2023, the UK's Financial Conduct Authority (FCA) published Market Watch 75, which sets out its latest observations about market soundings.

The newsletter reemphasises the importance of robust market soundings procedures to protect the market integrity, and manage the risk of investors using inside information from these soundings.

Preventing insider dealing and unlawful disclosure

The FCA reports observing cases where Market Sounding Recipients (MSRs) have traded the relevant financial instrument during the period after the Disclosing Market Participant (DMP) has initially communicated with, or sought their consent to receive, the sounding and inside information, but before the information has been discussed. 

In these instances the DMPs did not disclose the identity or nature of the proposed transaction or likelihood of it occurring, but the MSRs have been able to identify those details using information available to them.

The FCA highlights the fact that the market sounding regime protects unlawful disclosure of inside information by the DMP, but it does not protect the MSR from the rules around insider dealing.

 The FCA has made the following recommendations to DMPs to minimise the risk of insider dealing and unlawful disclosure:

  • Ensure their initial communications with MSRs do not contain information that would enable MSRs to identify the issuer. DMPs should check the wording in wall-crossing scripts;
  • Take particular care in respect of financial instruments with few actors and where potential external information held by MSRs could reasonably be used to identify the relevant financial instrument;
  • Be alert to the risk of unlawfully disclosing inside information in initial communications and consider whether the information is essential for MSRs to decide if they wish to consent. They should check to see if it can be tailored so as not to inadvertently disclose inside information;
  • Consider using specific arrangements and scripts where the MSR is a private individual who may be less aware of possible breaches;
  • Make it clear at the start of a market sounding that the communication is a market sounding, which gives the MSR the opportunity decline;
  • Minimise the time intervals between MSRs consent & the provision of inside information.

The FCA also highlighted its previous advice in Market Watch 51 and 58, which encourages MSRs to put in a place a 'Gatekeeper' arrangement for market soundings, in particular, where possible, have specific teams as the first point of contact and ensure staff are properly trained on the internal procedures and UK MAR.


The FCA has indicated it will be keeping a close eye on this issue.

If the FCA suspects behaviour detrimental to confidence in, and the fairness of, UK markets it can request a breadth of information, so we recommend that DMPs refresh their template marketing sounding scripts and company procedures for recording market soundings.

If you would like further advice on this, please contact Brad Isaac and Melanie Talbot.

Other News – Tougher rules on economic crime

The Economic Crime and Corporate Transparency Act 2023 received Royal Assent on 26 October 2023. 

The new Act is aimed at preventing abuse of UK corporate structures and tackling economic crime. 

Secondary legislation is required and Companies House guidance will need to be published before many of the provisions come into force. 

We will continue to report on this once these documents start to be produced.