FCA to probe possible conflicts in barrier options

Some buy-side firms avoid illiquid underlyings over manipulation risks

financial-conduct-authority-canary-wharf
FCA headquarters

UK regulators are to examine potential market manipulation in relation to foreign exchange digital and barrier options – a risk some buy-side firms try to avoid by only trading barriers on liquid, abuse-proof underlyings.

The UK Financial Conduct Authority handed out £1.1 billion ($1.7 billion) of fines to five banks on November 12 for failing to control their Group of 10 (G10) spot forex business, but said it would also conduct a wider-ranging investigation of how firms manage conflicts of inte

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