Market Integrity Update - Special Issue - March 2020

Special Issue, March 2020

Vigilance required on COVID-19

As the number of confirmed COVID-19 cases rises globally, we encourage all market stakeholders to be vigilant.

The market is more volatile, and we’re seeing higher than usual volumes of orders and trades.

We’ve been in contact with several market participants, investment banks, industry associations and market operators to understand the impact of COVID-19 on their operations, especially those with operations abroad and in affected areas.

While we recognise that many of you are already on high alert, we wish to emphasise the importance of:

  1. Business continuity plans – review, update and test your plans regularly, incorporating new information and addressing emerging challenges 
  2. Back-up arrangements – ensure your arrangements operate as planned with your allocated resources. Consider your human and technological resources (e.g. location, capacity, internet load and systems licences) 
  3. Stress testing – of systems and financial positions, in case markets fall further 
  4. Surveillance system alerts – focus on client risk limits and potential increased risk taking by clients and traders. Be prepared to manage these and report any suspicious activity.

Licensees facing challenges affecting their ability to provide financial services (in accordance with their authorisations) should contact their Intermediary Supervisor.

We recently consulted on the implementation of new market integrity rules for the maintenance and recovery of critical systems, with a focus on business continuity plans and outsourcing arrangements. While we’re finalising our position following feedback, some of the considerations in Consultation Paper 314 Market integrity rules for technological and operational resilience may be relevant to your planning.  

We’ll continue to closely monitor the markets (exchange and over-the-counter markets) and to check in with market stakeholders.

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Last updated: 30/03/2021 09:22