Coordinated trading

Definition

engaging in coordinated trading to gain an unfair advantage

Context

Dealers from the same or different firms may share information about large client flows or incoming and pending orders and coordinate their trading to gain unfair advantage due to anticipated market moves and by collectively exerting pressure on the market to, for example, ignite momentum, manipulate benchmarks and fixes or front run orders.

Surveillance

Effective implementation of surveillance alerts for coordinated trading requires capturing the following trade data:

  • client order data

  • communications data

  • trade data

Effective communication surveillance is key to identify attempts to coordinate trading. Trade and order data can be used to risk-focus communications search around large trade flows.

Risk taxonomy

Regulatory source

FCA FX market wide remediation programme