Market conduct information

Market conduct rules

Financial market regulation and market conduct rules aim to build confidence and ensure integrity, thereby supporting the integration, efficiency and transparency of markets. A number of rules prohibit certain actions, including the misuse of inside information and various forms of market manipulation. Exchanges and trading venues may have specific rules to prevent market disruption. Links to the relevant websites are provided at the end of this document. One example of such rules is exchange-imposed limits on the size of positions in various derivatives.

Market conduct rules and regulations apply to all individuals and legal entities. This means that all market participants must familiarise themselves with the relevant rules and requirements. Responsibility for complying with specific rules rests solely with the market participant, meaning the client of Soren.

All exchange trades are monitored, and suspicious transactions are subject to investigation by the regulators of the relevant markets and the authorities.

The following are examples of actions that breach market conduct rules.

• Using unpublished, price-sensitive information about a company to make a profit or avoid a loss by buying or selling shares and/or derivatives, or attempting to benefit from that information in any other way (insider dealing).
• Disclosing inside information.
• Disseminating false or misleading information about circumstances that are material to the valuation of securities, such as a company’s earnings, orders or product range, or a general shortage of supply.
• Disseminating false or misleading information, rumours or messages that may affect the value of securities, in order to profit from a change in price.
• Placing small buy orders for securities at successively higher prices to simulate rising demand alongside rising prices (painting the tape).
• Simultaneously buying and selling the same securities on behalf of the same beneficial owner to create a false or misleading impression of the supply, demand or market price of those securities (wash trades).
• Distorting liquidity or price by placing buy and sell orders for the same securities for the same amount under a prior arrangement between several parties (matched orders or trading to create an appearance of activity between several market participants).
• Cornering the market by acquiring large positions or transferring securities to third parties (parking) in order to distort the value of securities and force purchases at inflated prices (squeezing).
• Buying or selling securities shortly before an exchange closes in order to influence closing prices (marking the close).
• Buying or selling securities in order to change their price (pumping) or maintain it at a particular level, for example by capping or artificially fixing the price.
• Influencing commodity prices in order to create a false or misleading impression of the supply of or demand for securities.
• Placing orders without intending to execute them (spoofing).
• Creating layers of orders or decoys for other market participants who are trading in good faith, without intending to carry out actual transactions (layering), in a manner similar to spoofing.
• Attempting to reduce a share price through intensive selling or short selling (bear raiding).

Exchange rules and regulations

For more detailed information on market regulation and the relevant procedures, see the websites of the exchanges below.