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Vedder Thinking | News Sam Tyfield Weighs in on U.S., European Tech-Enabled Market Abuse Regulation in Thomson Reuters Regulatory Intelligence Article

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Sam Tyfield, a Partner in Vedder Price’s London office and member of the firm’s Finance & Transactions and Investment Services groups was recently quoted in the Thomson Reuters Regulatory Intelligence article, “Special Report: Are U.S. Regulators Ahead of European Counterparts in Tackling Tech-Enabled Market Abuse?” Over the past few years, regulators have fined trades and trading firms millions of dollars for technology-enabled market abuse and manipulation techniques, and while these instances of market abuse and manipulation have occurred worldwide, an overwhelming majority of the documented enforcement actions have been brought forth by the U.S., as opposed to UK, EU or Asian markets. The article explores this topic in-depth, providing potential reasons as to why there seems to be an enforcement imbalance between the U.S. and the UK or EU.

The article notes that one reason why there may be fewer instances of market abuse in the UK than in the U.S. is because the regulation and pre-trade risk checks aimed at preventing market manipulation are working better in Europe than in the U.S. Mr. Tyfield weighs in on this point, stating “The market surveillance teams on these exchanges are hot right now. The scrutiny of the teams asking member firms for reasons why certain trades were made has increased. Nine times out of 10 there is a perfectly good reason for what’s happened. Firms keep records. They make sure an audit trail is there.”

Mr. Tyfield later goes on to comment that while U.S. regulators did try and implement their own type of independent risk layer between a trader and the market, the rule fell short, with the level of compliance being very low. “15c35 had at its heart a good principle: that no one should be permitted 'naked' access to trading venues. It was ahead of the curve to a large extent and a forerunner to similar rules in the EU and, just like any regulation at the vanguard of change, was tested by market participants,” he said.

To read more of Mr. Tyfield’s commentary, as well as the article in its entirety, please click here.


Sam Tyfield