UK regulatory body the Financial Services Authority (FSA) is to implement a business intelligence solution in order to improve its ability to detect and stamp out market abuse.

The system, provided by analytics software specialist SAS, detects fraudulent trading and market abuse by analysing trading behaviour across a wide range of financial instruments. The system will be implemented by consultancy firm Detica and forms part of the FSA’s wider drive to enforce compliance with the Markets in Financial Instruments Directive, effective from November 2007.

The directive, which has been mired in controversy since it was first unveiled by the European Commission in April 2004, aims to dramatically improve both the transparency and fairness of the financial markets.

Last week, banking giant Lloyds TSB announced it plans to implement a new business intelligence software system in order to combat employee fraud.

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