Warning Notice Statement 17/5

The Financial Conduct Authority (the FCA) gave Interactive Brokers (UK) Ltd (IBUK) a
warning notice on 25 July 2017 proposing to take action in respect of the conduct
summarised in this statement.

The following is a summary of the reasons why the FCA gave IBUK a Warning Notice:


The FCA considers that in the period from 6 February 2014 to 28 February 2015
(the Relevant Period) IBUK breached Principle 3 of the FCA's Principles for
Businesses, because it failed to take reasonable care to organise and control its
affairs responsibly and effectively with adequate risk management systems in
relation to the identification and reporting of possible market abuse by its
customers;


The FCA considers that as a result IBUK failed on three separate occasions to
identify and report to the FCA transactions which it had reasonable grounds to
suspect amounted to market abuse in the form of insider dealing, in breach of
rule SUP 15.10.2R in force during the Relevant Period; and


The FCA does not consider that IBUK’s senior management or other staff were
aware that its systems and controls fell short of required standards until an FCA
visit to IBUK in December 2014.

Important: a warning notice is not the final decision of the FCA.
IBUK has the right to make representations to the Regulatory
Decisions Committee (RDC) which, in the light of those
representations, will decide on the appropriate action and whether
to issue a decision notice. The RDC is a Committee of the FCA board
which decides whether the FCA should give certain statutory
notices described as within it scope by the FCA’s Handbook.

If a decision notice is issued, IBUK has the right to refer the matter
to the Upper Tribunal which would reach an independent decision
on the appropriate action for the FCA to take, if any.

If either the RDC or the Upper Tribunal decides that no further
action should be taken, the FCA will publish a notice of
discontinuance provided it has IBUK’s consent.