Purpose
Monitor market-facing activity, investigate and enforce conduct standards, cooperate with authorities, report to governance bodies and improve controls, consistent with the approved Market Conduct & Trading Compliance Manual v1.1 sections 8 through 12.
Steps
| # | Action | Details | Evidence |
|---|---|---|---|
| 1 | Maintain risk-based surveillance covering pricing, execution, front running, market abuse, client behavior, wallet and settlement routes, on-ramping and off-ramping, repeated transactions and profile inconsistency | Bitkaya maintains surveillance and monitoring processes proportionate to the risks arising from its trading and market-facing activity; surveillance may include review of unusual pricing or execution patterns; front running or market abuse indicators; suspicious or inconsistent client behaviour; unusual wallet destinations or settlement routes; elevated-risk off-ramping or on-ramping behaviour; activity inconsistent with the client’s profile; and repeated, structured or otherwise unusual transactions that may require escalation under Bitkaya’s AML/CTF/CPF framework | MCT 8.1 |
| 2 | Document and escalate material concerns to Compliance and coordinate suspicious-activity, sanctions, fraud, safeguarding and cybersecurity assessment where relevant | Where review identifies a material concern, the matter must be documented and escalated appropriately (MCT 8.1). Bitkaya maintains an internal process for escalation and review of unusual or suspicious matters arising from trading activity, settlement activity, client behaviour, wallet exposure or related conduct; internal classifications may be used for case handling, prioritization and recordkeeping; external FIU reporting, where required by law, is made through the UTR process; where a matter also involves sanctions, client asset restrictions, fraud concerns or cybersecurity issues, those dimensions must be assessed separately and managed in coordination with the relevant control functions | MCT 9.2 |
| 3 | Conduct periodic independent audits based on risk, business growth, regulatory requirements and prior findings | Internal audits will be conducted at defined intervals to evaluate compliance with market conduct, AML/CFT, custody and data protection policies; internal audit functions will remain independent of day-to-day business operations to ensure impartial assessments; audit scope and frequency will reflect the firm’s risk profile, business growth and regulatory requirements; findings will be reported to senior management and the Board with corrective actions tracked to completion | MCT 8.2 |
| 4 | Apply consistent, proportionate disciplinary action and assess regulator, FIU, law-enforcement or authority reporting | Depending on the severity of misconduct, disciplinary actions may include verbal/written warnings, mandatory training, reassignment, suspension or termination; serious violations may be reported to regulators, law enforcement or other authorities as required by law | MCT 8.3 Graduated Sanctions, Regulatory Reporting |
| 5 | Protect good-faith reporters from retaliation and hold managers accountable for failure to detect or respond within their oversight | Managers and supervisors will also be held accountable if they fail to detect or respond to misconduct within their oversight responsibilities; employees who report suspected misconduct in good faith will be protected from retaliation, encouraging a culture of transparency and accountability | MCT 8.3 Accountability, Whistleblower Protection |
| 6 | Cooperate with supervisory authorities and coordinate inquiries, inspections, audits, requested records, system access and personnel access through Compliance and Legal | Bitkaya will cooperate fully with supervisory authorities, providing timely access to records, systems and personnel upon request; regulatory inquiries, inspections or audits must be escalated immediately to the Compliance and Legal teams who will coordinate responses; where appropriate, Bitkaya will participate in industry and regulatory consultations contributing to the development of balanced digital asset regulation; a Regulatory Affairs function will oversee ongoing relationships with supervisory bodies ensuring consistency in communication | MCT 9.3 |
| 7 | Maintain cross-border regulatory alignment and escalate conflicts or extraterritorial requirements | Activities will be assessed for compliance with laws that may apply outside the firm’s home jurisdiction, including securities regulations, sanctions and anti-corruption laws; Bitkaya will align its AML/CFT framework with the FATF recommendations ensuring global consistency; policies and procedures will be designed to meet the strictest applicable standards to mitigate conflicts between regulatory regimes; enhanced due diligence will be applied to international clients and transactions to ensure compliance with local and global rules (MCT 9.4). Bitkaya aligns its practices with the Global Digital Finance (GDF) Code of Conduct, reinforcing adherence to international standards of ethical behavior, transparency, accountability and consumer protection, ensuring a globally recognized benchmark for conduct, consistency across jurisdictions and contribution to industry-wide trust and integrity | MCT 10 |
| 8 | Provide annual conduct training and quarterly compliance reports covering breaches, complaints, anomalies, risks and remediation | Annual training sessions cover fair dealing, insider trading and conduct ethics; frequency and content will expand as staffing and products diversify; quarterly compliance reports to management summarizing breaches, complaints or anomalies; frequency and depth will scale with business volume | MCT 12.4 Training & Awareness, Monitoring & Reporting |
| 9 | Track findings and actions to verified closure | MCT 8.2 Reporting | |
| 10 | Review proportionality annually and scale surveillance, analytics, audit trails and specialist resources as trading activity grows | Apply the proportionality framework across trading surveillance and best execution (manual reviews of a sample of trades; automated systems introduced as trade volume increases); market manipulation and insider trading detection (behavioral red-flag triggers with escalation to Compliance; transition to automated blockchain analytics as activity scales); conflicts of interest (simplified register; formal conflict-of-interest matrix introduced as new products or partnerships are added); order handling and client fairness (standardized manual checklists; audit logs and automated alerts added later); client communication and promotion (all marketing material pre-approved by Compliance; future scalability through templated automated review workflows) (MCT 12.4). Commit to periodic reassessment of proportionality as Bitkaya expands; incremental automation of monitoring, reporting and compliance processes; feedback integration from audits, regulator communications and client feedback; and progressive maturity from manual principle-based controls to structured system-supported compliance processes as the firm scales | MCT 12.6 |
Exceptions and Escalation
Material market abuse, client harm, asset risk, repeat control failure or regulatory breach requires immediate management and Board escalation and external-reporting assessment.
Records
- Surveillance plan, alerts and reviews
- Investigation and disciplinary decisions
- Independent audit and remediation
- Regulatory inquiry and response records
- Annual training completion
- Quarterly management reports
- Proportionality review and improvement plan
Relationships
- Policy: POL-MCT-001 Market Conduct and Trading Compliance Manual
- Process: PRC-CPO-001 Client Protection and Operations
- Control: CTRL-MCT-007 Ensure Market Conduct Surveillance Reporting and Improvement Operate
- Related AML process: PRC-FCI-001 Financial Crime and Integrity
Assurance
Runtime effectiveness results are maintained in Odoo and assessed through the Hermes workflow tracked in ISS-HERMES-001. This note defines design, ownership, evidence expectations and testing method; it does not contain a manually maintained operation, evidence or overall effectiveness rating.
- Frequency: ongoing risk-based surveillance, annual training and proportionality review, quarterly reporting
History
- 2026-07-26: Created from sections 8 through 12 of the approved MCT Manual.