Inter-trading venues manipulation

Definition

undertaking trading or entering orders to trade in one trading venue or outside a trading venue (including entering indications of interest) with a view to improperly influencing the price of the same financial instrument in another trading venue or outside a trading venue, related spot commodity contract, or an auctioned product based on emission allowances

Surveillance

Effective implementation of surveillance alerts for inter-trading venues manipulation requires capturing the following trade data:

  • order data (including unexecuted orders)

  • trade data

Trade, order and price data from all trading venues that a firm participates in and all OTC activity needs to be considered together through the lenses of the same underlying risk in designing surveillance alerts.

The simplest example would be a dual listed stock. A more complex example would be a stock and a related future contract. An even more complex example would be an OTC single stock total return swap or a contract for difference and a future contract.

Inter-trading venue manipulation is similar to cross-product manipulation.

Regulatory source

Undertaking trading or entering orders to trade in one trading venue or outside a trading venue (including entering indications of interest) with a view to improperly influencing the price of the same financial instrument in another trading venue or outside a trading venue, related spot commodity contract, or an auctioned product based on emission allowances — usually known as ‘inter-trading venues manipulation’ (trading on one trading venue or outside a trading venue to improperly position the price of a financial instrument in another trading venue or outside a trading venue).

COMMISSION DELEGATED REGULATION (EU) 2016/522, Annex II, Section I, 2 (c)