Everyone - and by that I mean us compliance nerds - reads FCA enforcement notices.

Far fewer people pay attention to what is happening on the exchanges.

A recent ICE Futures Europe disciplinary notice caught my attention for precisely that reason. Marex Financial was fined £252,000 for breaches of the Exchange for Swap rules, including failures relating to systems and controls, supervision and training.

Exchange enforcement rarely generates the same commentary as an FCA Final Notice.

But for firms operating in wholesale markets, it can consume an extraordinary amount of Compliance time.

When the facts aren't particularly mysterious

During my time at TP ICAP, I spent a significant proportion of my time dealing with investigations and enforcement proceedings brought by ICE and CME, particularly in relation to block-trade rules.

At times, we were receiving between two and five requests for information a month.

Often the underlying issue was relatively mundane: a block trade reported outside the prescribed reporting window, for example. Once the timestamps had been established, there wasn't exactly a great mystery to solve.

It was usually a regulatory slam dunk.

But each incident could generate another request for information, another investigation and potentially another penalty.

Two things about that approach have always struck me.

Enforcement as regulatory communication

First, exchange disciplinary notices often tell the wider market remarkably little.

Contrast that with an FCA Final Notice, which will typically explain what happened, why the firm's arrangements were inadequate and the factors underlying the regulatory outcome.

Exchange notices can be considerably more economical.

Where a firm has been found to have inadequate systems and controls, that can feel like a missed opportunity. Enforcement does more than punish an individual firm. Done well, it can help the wider market understand what went wrong and what the regulator or exchange considers good practice to look like.

The more useful the explanation, the greater the potential preventative value of the enforcement action.

Breach or control failure?

The second issue is more fundamental.

Exchange enforcement can be highly transaction-specific. An individual late block-trade report can become an enforcement matter in its own right rather than being considered primarily as evidence of whether the firm's wider control environment is working effectively.

There was always a certain irony in explaining to an exchange that we absolutely agreed the controls needed improving, but that the Compliance team was spending so much time responding to requests for information about individual breaches that finding the time to improve those controls was becoming increasingly difficult.

Perhaps not the strongest defence I've ever advanced.

But there is a serious point underneath it.

What outcome are we trying to achieve?

None of this is to suggest that exchanges shouldn't enforce their rules. They plainly should.

Individual breaches matter, and apparently minor reporting failures can sometimes be evidence of much wider weaknesses.

But repeatedly pursuing readily provable individual infringements does not necessarily produce the best regulatory outcome if enforcement activity begins competing with remediation for the same finite Compliance resources.

The more useful question may sometimes be:

What does the pattern of breaches tell us about the underlying control environment — and what needs to change to prevent them recurring?

That doesn't mean ignoring individual rule breaches. It means using them as evidence to identify and address the underlying problem.

The Marex notice is also a useful reminder that market-conduct compliance extends well beyond whatever the FCA happens to have published this week.

Sometimes the issues keeping Compliance teams busiest are buried rather deeper in the exchange rulebook.