It appears that the FSA is taking a much more aggressive approach to violations in the equity market.  While the SEC is busy asking vague questions in their concept release like, “What standards should the Commission apply in assessing the fairness of the equity markets?”, the FSA is busy punishing participants who are not upholding their fiduciary responsibilities.  From todays Financial News:

The FSA today fined high-frequency trading firm Getco £1.4m (€1.6m), investment bank Credit Suisse £1.75m and agency broker Instinet Europe £1.05m for “multiple breaches that resulted in failures to provide transaction reports promptly and correctly to the FSA”. 

Alexander Justham, the director of markets at the FSA, said: “Firms must meet their obligation to provide accurate and timely data. Without quality data we cannot properly detect and investigate market abuse, identify market wide risks or have a comprehensive understanding of the activities of each firm.”

He added: “The standard of regulatory reporting by these firms fell far short of what the FSA expects and requires.”

http://www.efinancialnews.com/story/2010-04-08/fsa-fines-instinet-getco-and-credit-suisse

Firms that now control over half the volume in equities must be held to the highest standards.  Markets have come to rely  (probably too much) on these firms to supply liquidity.  They are the new “specialists” an “market makers” and they must be held accountable. 

And by the way, do you remember “flash” orders and the controversy they caused last summer?  Months after a proposal and long comment period, the SEC has still failed to act on them and they are still part of our equity market.