FCA Warns Against Trading on Unpublished Polls in Light of Brexit

Published On September 4, 2019

4 September 2019: With Brexit looming, the UK’s Financial Conduct Authority (FCA) has warned that trading currencies or government bonds on the back of information from unpublished polls could breach market abuse rules.

In a statement, issued on 3 September 2019, the FCA recommended that firms should take legal advice on specific questions and actions “where appropriate”. It added that “all firms and individuals, regardless of whether they carry out regulated financial services activities, fall in scope of our regulatory remit on market abuse.”

More specifically, the FCA issued a formal response, which set out that a polling firm would be in breach of the rules if it shared bond market-moving information pre-publication, other than in the normal exercise of employment, profession or duties. Moreover, it said that it could also be an offence “for anyone in possession of the information to trade in the relevant government bonds in advance of publication of the polling results, if it is trading on the basis of the anticipated bond movement that will result from publication of the results.”

The FCA’s warning has been issued in light of concerns raised following the 2016 EU referendum that polling firms provided information to broadcasters while simultaneously selling data to hedge funds so that they could trade on the information. Such concerns have prompted FCA Chief Executive, Andrew Bailey, to meet with polling industry officials to establish how the FCA could interact with these issues.