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The UK’s financial watchdog could investigate market-moving leaks of financial data

(6 Views) March 16, 2017 9:47 am | Published by | No comment

Leak oil pipeline

Reuters / Akintunde Akinleye

LONDON —The UK’s financial watchdog should investigate reports of market-moving leaks of official economic data, according to the chair of the House of Commons’ Treasury Select Committee.

Conservative MP Andrew Tyrie wrote to the Financial Conduct Authority (FCA) on Wednesday urging an investigation, after the Wall Street Journal reported that traders appeared to be using inside information to profit from the bond future market.

“I have seen recent press reports which suggest that ONS statistics may be being leaked prior to their official release, and that this information is being used for inappropriate gain in financial markets,” wrote Tyrie.

“The Financial Conduct Authority will want to consider this matter, if it is not already doing so, given one of its objectives is to protect and enhance the integrity of the UK financial system.”

The FCA — which has oversight for tackling insider trading — declined to comment to Business Insider but said it would be responding to Tyrie’s letter “in due course.” Sources told the Financial Times that the FCA was not currently investigating the matter.

The Wall Street Journal’s report on Monday cited research by US academic Alexander Kurov which analysed price data in the hour before key economic data was released, covering the period April 2011 to December 2016.

Kurov found that bond future prices moved on average by 0.029% in the direction they would continue to move after the data was published, suggesting some market participants had access to inside information.

Reuters also reported on Tuesday that on several occasions over the past 12 months, the pound moved against the dollar minutes before the release of retail sales numbers in the same direction as it would continue to move once the figures were published.

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