Whole Section

  • 3.2

    Rule 5.12.2(b): Whether the execution of the transaction is likely to cause or contribute to a material change in the price of, or the market for, the security or futures contract, and whether the person involved or another person with whom the first person is collaborating may directly or indirectly benefit from alterations in the market or price.

    Added on 3 June 20193 June 2019.

    • 3.2.1

      In the absence of a good reason to buy or sell quickly, customers generally want to obtain the best price. A Trading Member or Trading Representative who receives an order that would materially alter the market for, or the price for, the security or futures contract, should consider whether it is genuine or manipulative.

      Added on 3 June 20193 June 2019.

    • 3.2.2

      Trading Members and Trading Representatives must also know their customers. Orders placed by a customer or a related party of that customer, who may have an interest in creating a material change in the market for, or the price of, a particular security or futures contract, should be closely examined.

      Added on 3 June 20193 June 2019.

    • 3.2.3

      Examples:

      (a) Orders placed by a large holder of a particular security or futures contract who may have an interest in inflating the value of that holding (e.g. window dressing for investment performance purposes), or decreasing the price of the security or futures contract (e.g. as a precursor to a takeover bid or for purposes which include lowering a conversion price).
      (b) Buying during the period of a rights issue by an underwriter, sub-underwriter or any other party which increases or maintains the price of the underlying security may include, as a purpose, inducing others to take up their rights entitlement under the issue.

      Added on 3 June 20193 June 2019.