Brokers and bankers in the City of London are flagging up twice as many suspicious trades for the FSA than this time last year, following indications that the regulator plans to carry out spot checks on industry compliance efforts.

An average of 100 monthly “suspicious transaction reports” (STRs) have been filed by financial institutions over the last few months, double the average of 50 for the same period last year. Several of the reports have led to further investigation by the FSA’s market monitoring divisions.

The upsurge follows a letter from division head at the FSA Patrick Sens to 300 City firms inquiring about why they file around half as many STRs as competitions of similar size. A second letter followed to the rest of the industry warning that the financial watchdog planned to visit firms in order to assess their monitoring efforts.

“Personally I am pleased with the level and quality of the industry’s response,” said Mr Spens. “People are sending in more STRs and we haven’t seen a downgrade in the quality.”

The most significant investigation derided from the new wave of STRs led to the conviction of six men that formed part of an insider trading ring last week.