Misleading mark-up


misleading clients by implying they are getting the best rate, when in fact the rate they received may have included a significant 'hard mark-up'


Misleading hard mark-up may involve the following deceptive practice: a client calls sales who put forward the call to trading. The client is told that trading will provide a best market price without any mark-up. In reality, trading knows the client is calling directly and they quote a price including a mark-up on top of the risk clearing price.

Deception my involve deliberate manipulation such as telling the client on the open line that trading is providing best market price without a mark-up while sales and trading exchange hand signals or chat messages to coordinate application of an undisclosed mark-up.


Effective implementation of surveillance alerts for misleading mark-up requires capturing the following trade data:

It is challenging to detect inappropriate mark-ups for 'voice' flows since traders and sales can use an argument of delayed trade booking to justify worse client prices. The inherent risk of inappropriate mark-ups is lower in all-electronic flow where timestamps are accurate and there is no delay or scope for sales and trading to enter into collusive behaviour against the client.

Risk taxonomy

Parent risks

Related risks

Regulatory source

FCA FX market wide remediation programme