RE: Fake Close13 Sep 2020 11:30
bassguy - what I wonder is whether it would be possible for a shareholders association to, completely independently of the company, engage a US compliance monitoring specialist to run their algorithms over our AIM trading records. It would indeed be a first for them and probably a first for AIM but it would surely help the London Stock Exchange in making sure that rules 1400 and 1410 are properly enforced, viz:
1400 A member firm shall not, in respect of its on Exchange business:
1400.1 do any act or engage in any course of conduct which creates or is likely to create a false or
misleading impression as to the market in, or the price or value of, any security;
1400.2 cause a fictitious trade or a false price to be input into the trading system;
1400.3 effect a trade at any price which differs to an unreasonable extent from any firm price
displayed on the trading system in that security;
1400.4 do, or attempt, any act or engage in any course of conduct, which constitutes or is likely to
constitute market abuse under Regulation 596/2014 of the European Parliament and of the
Council on market abuse (MAR);
1400.5 do any act or engage in any course of conduct which is likely to damage the fairness or
integrity of the Exchange’s markets; or
1400.6 do any act or engage in any course of conduct which causes, or contributes to, a breach of
the Exchange’s rules by another member firm.
Specifically 1400.1 , 1400.2 and 1400.5 are I think at issue here
Rule 1410
A member firm trading in a security shall not do any act or engage in any course of conduct
the sole or main intention of which is to move the price of that security or the level of any
index of which that security is a component.
and specifically in the guidance - "• a member firm with a partially hedged, or un-hedged, OTC futures or options
position, trades in the cash market, apparently uneconomically in respect of that cash
business, but to the benefit of the OTC position"
and further on the subject of UT trades - "In executing a trade to achieve the closing price for a customer, member firms may wish to use a market order in the closing auction. A member firm may also enter a priced order on
the other side of the order book if this represents genuine trading interest. This would not of
itself constitute a breach of rule 1410.
The Exchange monitors all situations where a member firm executes against itself,
particularly around sensitive times such as the end of the trading day or during index expiry
pricing periods, due to the potential for a member firm to influence prices in this manner. In
carrying out this strategy, member firms should have regard to the impact on the market and
should consider the following:
• the timing of orders entered, to allow other member firms to react to these orders; the
price of the orders or quotes as compared to the prevailing market price; and
• other regulatory requirements, including whether this strategy should be
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