UK FCA finds most firms following regulatory requirements in dividend arbitrage

Most rms executing transactions with, or on behalf of clients engaged in dividend arbitrage, appear to comply with our requirements. However, a small number of rms may not have undertaken a su ciently detailed assessment of the purpose and nature of transactions that appear to be linked to WHT reclaims. This raises the risk that some rms may become involved in potentially contrived transactions created in order to support fraudulent WHT reclaims. As well as being potentially criminal in nature, such activity may also amount to market abuse. This is because it could give false or misleading signals about the supply of or demand for the relevant security.

Firms which execute transactions with or on behalf of clients who are engaging in
such strategies, should be alert to the risk that they may be used to facilitate market abuse or to further nancial crime. Under our rules, rms are required to establish and maintain e ective controls to ensure that they manage these risks and their strategies are compliant with the rules set out below under ‘Relevant rules’.

The full document, “Dividend arbitrage – our requirements for firms” is available at

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