Market Abuse Monitoring
In addition, ECS contains several scenarios to identify activity that may be deemed manipulative. Our service has multiple algorithms to monitor for market abuse behaviors with both general and specific criteria and includes criteria to identify any activity prohibited by FINRA or the SEC, including:
- Spoofing/layering - using one or multiple orders to give the appearance of interest on one side of the market which facilitates execution of an order(s) on the opposite side of the market, followed by cancellation of the remaining orders. Our service looks for this behavior with both general and specific criteria and includes criteria to identify any activity prohibited under FINRA Rule 5210.
- Marking the close - using one or multiple trades to artificially increase or decrease the closing price for a security. Our service takes into account varying liquidity levels and other market activity to highlight potential exceptions.
- Manipulating the open - entering one or multiple non-bona-fide orders on one marketplace to influence the market for a security, subsequently trading in an away market and then canceling the initial orders. Our service will highlight potential instances based upon a specific pattern of behavior occurring pre-open.
- Cross Trade - a practice where buy and sell orders for the same asset are offset without recording the trade on the exchange. This is an activity that is not permitted on most major exchanges.
- Wash sales - buying and selling the same security at the same time, same price and for the some beneficial owner. Our service will highlight potential exceptions based upon the account identifying information provided by the firm.