MiFID firms and suspicious transaction monitoring

Irish MiFID-authorised investment firms are reminded of their Market Abuse Regulation (MAR) obligations relating to detection and reporting of suspicious transactions.

Key takeaways for investment firms from the CBI's enforcement

Regulated investment firms must prioritise the development, implementation and maintenance of robust systems to detect and report suspicious activities related to market transactions.  

To maintain compliance and support market integrity, investment firms should focus on the following key practices: 

• Enhanced systems and controls: implement comprehensive systems to effectively escalate and report suspicious activities. This proactive approach is necessary to meet MAR obligations and facilitate the Central Bank of Ireland's market supervision efforts

• Governance and risk management: establish strong governance frameworks that support consistent and sound decision-making processes. This includes forming committees or structures that apply the "reasonable suspicion" threshold accurately and consistently

• Knowledge and experience: ensure that decision-makers possess the necessary expertise to make impartial and informed decisions regarding suspicious transactions. This includes involving compliance officers in critical discussions and decisions

• Comprehensive record-keeping: maintain thorough documentation of all analyses and decisions related to suspicious activities. This practice not only supports consistent decision-making but also enhances the firm's ability to demonstrate regulatory compliance

• Role clarity and training: clearly define roles and responsibilities across all lines of defence in managing market abuse risks. Support this clarity through leadership, regular training, and effective communication

How to strengthen compliance  

All investment firms should ensure rigorous assessment of their suspicious transaction and order report (STOR) processes considering the recent enforcement action.  

By prioritising these takeaways, investment firms can not only avoid regulatory pitfalls but also contribute positively to the broader financial ecosystem's integrity and trustworthiness. 

How Ogier can help 

Ogier's Investment Funds and the Regulatory, Investigation and Enforcement teams can assist investment firms by offering expert guidance on the development and implementation of robust risk and compliance frameworks, training programmes and effective monitoring systems, as well as assessing red flags and suspicious activity, regulatory reporting and the management of independent root cause internal investigations. Contact our team in Ireland via their contact details provided below. 

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Disclaimer

This client briefing has been prepared for clients and professional associates of Ogier. The information and expressions of opinion which it contains are not intended to be a comprehensive study or to provide legal advice and should not be treated as a substitute for specific advice concerning individual situations.

Regulatory information can be found under Legal Notice