Trade surveillance
The FCA’s 5-year strategy: What it means for trade surveillance, market abuse, and the RegTech frontier
Ben Parker
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Chief Executive Officer & Founder
April 15, 2025
The Financial Conduct Authority (FCA) has released its much-anticipated five-year strategy for 2025-2030, signalling a shift in how it will supervise financial markets in the UK. At its core, the strategy reflects a regulator adapting to rapid technological change, increased cross-border market activity, and the evolving expectations of investors and lawmakers.
For compliance and surveillance professionals, the strategy offers important insights into the FCA’s thinking on trade surveillance, market abuse, and the role of RegTech.
The FCA is moving further toward a data-first regulatory model. Rather than relying primarily on periodic assessments and reactive investigations, the regulator wants to build a supervisory approach rooted in real-time data analysis and early intervention.
In practice, this means the FCA will be investing more heavily in its own analytics capabilities, while also expecting firms to demonstrate that their surveillance systems can identify and escalate issues proactively.
Trade surveillance is a central pillar of the strategy. The FCA makes it clear that it expects firms to move beyond basic compliance and toward surveillance systems that are genuinely effective at detecting market abuse.
Key expectations include:
• Cross-market surveillance capabilities: The FCA wants firms to look beyond individual asset classes and consider how trading activity across different markets could signal manipulation.
• Advanced detection models: There is an expectation that firms adopt and continuously refine models capable of identifying complex abuse scenarios, including those facilitated by algorithmic and high-frequency trading.
• Greater transparency in surveillance processes: Firms should be able to explain how their systems work, how alerts are triaged, and how decisions are made – not just demonstrate that a system exists.
This aligns closely with what we outlined in our Global Market Abuse Surveillance Report, where we identified cross-market surveillance and model effectiveness as two of the key challenges facing firms globally.
The strategy confirms the FCA’s continued focus on market abuse prevention. Notably, the FCA is broadening its view of what constitutes market risk. While traditional threats like insider dealing and market manipulation remain priorities, the FCA is also turning its attention to:
• Emerging asset classes: The growing digitisation of financial markets introduces new abuse vectors. The FCA wants to ensure that firms operating in digital asset and tokenised securities markets are applying the same level of scrutiny as those in traditional markets.
• Communications surveillance: The strategy emphasises the importance of monitoring and retaining electronic communications. With the ongoing rise of encrypted messaging and AI-generated content, firms face growing challenges in maintaining effective oversight.
• Behavioural analytics: The FCA is interested in firms’ ability to detect not just suspicious trades, but suspicious patterns of behaviour that may precede market abuse.
Perhaps the most forward-looking aspect of the strategy is its recognition of RegTech as a critical enabler of effective compliance. The FCA acknowledges that technology is not just an operational tool but a strategic asset that can enhance market integrity.
Importantly, the FCA is signalling a more structured approach to engaging with RegTech providers and evaluating how firms adopt and govern technology within their compliance frameworks.
This opens the door to deeper collaboration between regulators, firms, and technology providers – but it also means the FCA will scrutinise how firms implement and oversee the RegTech solutions they use.
For compliance and surveillance teams, the key takeaways from the FCA’s strategy are:
1. Surveillance effectiveness is non-negotiable: It’s not enough to have a surveillance system in place. The FCA expects firms to demonstrate that their systems are effective, adaptable, and well-governed.
2. Cross-market and cross-asset visibility is essential: Siloed surveillance approaches will increasingly fall short. Firms need to connect the dots across markets, products, and communications.
3. RegTech adoption will come under scrutiny: The FCA’s interest in technology governance means that firms must be able to explain their technology choices, validate their models, and ensure ongoing oversight.
4. Proactive compliance will be rewarded: The FCA’s shift toward data-driven, outcomes-focused supervision means that firms that invest in proactive compliance will be in a stronger position.
eflow Global is at the forefront of the RegTech movement, providing advanced trade surveillance and regulatory reporting solutions that help firms meet the FCA’s evolving expectations. Our platform is designed to provide cross-market visibility, intelligent alerting, and robust governance tools – exactly what the FCA is looking for.
Get in touch to find out how we can help you stay ahead of the regulatory curve.
