Suspicions of market abuse must be reported to the FIN-FSA appropriately

The appropriate reporting of suspicions of market abuse will be a focus of attention for the FIN-FSA in 2025. According to the FIN-FSA’s findings, a fairly high concentration of reports come from certain market operators. In addition, there are significant differences between different whistleblowers with regard to the threshold for reporting cases of suspected abuse and in the level of detail and scope of information contained in the reports. This article reviews good practices for reporting cases of suspected abuse.

General information on the obligation to report suspicions of market abuse

Article 16 of the Market Abuse Regulation (MAR)¹ requires market operators and investment firms that operate a trading venue, as well as any person who professionally arranges or executes transactions, establish and maintain effective arrangements, systems and procedures to detect and report suspicious orders and transactions.

Supervision must cover all orders received and transmitted and all transactions undertaken, regardless of the scale of the activity. The effectiveness and coverage of supervision must be assessed regularly, at least annually. Documentation of the annual assessment and any measures taken based on the assessment must be submitted to the FIN-FSA on request. The arrangement of supervision of abuse is discussed in the FIN-FSA’s supervision release 69/2019.

If a market participant as described above has reasonable grounds to suspect that an order or transaction concerning a financial instrument, regardless of whether it is given or executed on or off the trading venue, may constitute insider dealing, market manipulation or an attempt to do so, the market operator must report it to the FIN-FSA without delay. Article 7 of Commission Delegated Regulation (EU) 2016/957 and the Annex to the Delegated Regulation describe in more detail the content of the suspicious transaction and order report (STOR²). A STOR reporting form and instructions on how to submit a STOR report can be found on the FIN-FSA’s website.

In addition to STOR reports under the MAR, any market participant has the opportunity to submit reports of suspected abuse (whistleblowing system) or informal market observations to the FIN-FSA.

Reports play an essential role in market abuse supervision

Comprehensive and high-quality arrangement of supervision of suspicious transactions and orders by investment service providers and market operators is essential to detect market abuse, such as insider dealing and market manipulation or an attempt to do so.

In their supervision of suspicious transactions and orders, market participants must, in addition to arranging supervision themselves, take into account the obligation to report possible abuses to the FIN-FSA without delay. STOR reports submitted by market operators and their quality play a significant role in the FIN-FSA’s supervision of market abuse.

As part of the assessment of the appropriate reporting of suspected abuse, the FIN-FSA focuses attention on market participants referred to in Article 16 of MAR whose business activities, given their size, scale and nature, could have been expected to detect market abuse, but from whom the FIN-FSA has not received STOR reports to a corresponding extent or even at all.

Content of STOR reports and reporting threshold

When assessing the appropriateness of the reporting of suspected abuse, the FIN-FSA pays attention to, among other things, the detail and scope of the information contained in the STOR report and the reporting threshold. A report must be submitted to the FIN-FSA without delay when there is a reasonable suspicion that an order or transaction may involve insider trading or market manipulation or an attempt to do so. A report therefore does not need to present conclusive evidence that market abuse has actually occurred; a reasonable suspicion is sufficient to make a report. Upon receiving a report, the FIN-FSA and other supervisory authorities may use their own powers to obtain any additional evidence.

However, the more comprehensive and detailed information the report contains about the trader and suspicious trading transactions, the more effectively the FIN-FSA can investigate suspected abuse. It is also possible to supplement the report, if necessary, by submitting relevant additional information to the FIN-FSA after the report has been made.

In some situations, reasonable suspicion of market abuse may only arise some time after the suspicious activity, based on subsequent events or information. In such cases, suspicious activity should also be reported to the supervisory authority. In this specific situation, the report should justify the delay between the occurrence of the suspicious activity and the reporting of the suspected abuse.

The notification must clearly state the type of market abuse suspected and the reasons for the suspicion. The report must contain a clear description of the event. In addition, it must indicate, among other things, the type of order and trading as well as the location, time, price and volume of the activity. The FIN-FSA reminds entities that all relevant documentation, such as order information, telephone recordings and email conversations, must also be attached to the report.

Suspected abuse of inside information

Inside information is defined in Article 7 of the Market Abuse Regulation. Suspected abuse of inside information therefore relates, as a rule, to inside information published in a stock exchange release or company release. If the suspected abuse of inside information relates to information published in a press release, for example, the report should state on what basis the whistleblower considers the information contained in the press release to be inside information pursuant to the Market Abuse Regulation.

Suspicion of abuse of inside information may be directed at any trader, i.e. a trader suspected of market abuse does not have to be an insider of the issuer, for example. If a market operator is aware of a possible connection between a trader and an issuer of a financial instrument and/or inside information, this should be stated in the report.

A verified or suspected connection between a trader and an issuer or other party potentially related to the inside information is therefore not necessary for the submission of a report; suspicions can be reported even without this, if there are other grounds to suspect abuse of inside information in the case. Among other things, the exceptional nature of certain trades of an investment service provider’s client relative to the trader’s usual trading activity and their successful timing before the publication of inside information may support the submission of a report to the FIN-FSA.

Suspicions of market manipulation

Market manipulation is defined in Article 12 of the Market Abuse Regulation. According to the Regulation, market manipulation means, among other things, placing an order to trade which gives false or misleading signals as to the supply of, demand for, or price of a financial instrument. Among other things, a repeated trading pattern where the trader’s activity does not appear to have an economic purpose and is likely to mislead other market participants about the price or volume of a security may be manipulative. Trading should be examined over a time horizon that provides a sufficient overall picture of the trader’s activity and the potential manipulative nature of the trading.

The report should clearly indicate the suspected form of manipulation, if this can be determined. A non-exhaustive and illustrative list of indicators of manipulative behaviour can be found in Annex II to Commission Delegated Regulation (EU) 2016/522.

Previous FIN-FSA Market Newsletters have covered different forms of manipulation and their characteristics:

For further information, please contact:

Juha Manu, Senior Market Supervisor, juha.manu(at)fiva.fi or tel. +358 9 183 5323
Hermanni Teräväinen, Chief Supervisor, hermanni.teravainen(at)fiva.fi or tel. +358 9 183 5346

^{1) Market Abuse Regulation (EU) No 596/2014.}

^{2) Suspicious Transactions and Orders Report}