NASDAQ OMX Oslo ASA (the exchange) has issued a violation charge to Merrill Lynch Commodities (Europe) Limited (MLCE) in the amount of NOK 350,000 for breach of the Market Conduct Rules (MCR).
On 15 June 2012 MLCE offered two sell orders on the exchange which lowered the best asking price of ENOQ3-12. While offering the sell orders MLCE bought larger quantities in the OTC market and paid the same price as the price of its sell orders. Market Surveillance has conducted extensive investigations following the incident and the Disciplinary Committee has made a recommendation to the exchange. The recommendation from the Disciplinary Committee can be found here: http://www.nasdaqomx.com/digitalAssets/86/86635_thedisciplinarycommitteesrecommendation.pdf
The exchange has concluded that MLCE violated the prohibition against market manipulation set out in MCR section 5.1. cf Enclosure 1 by offering two sell orders on the exchange while buying larger quantities OTC in the same product at the same price. The two sell orders “..gave, or were likely to give, false or misleading signals as to the supply for and price of a Listed Product,” cf. MCR section 5.1 cf Enclosure 1 Section 1.1 litra a.
It is not decisive for the application of the regulation on market manipulation whether misleading the market was done deliberately, as the exchange finds that MLCE at least should have been aware of, that these actions gave or were likely to give false or misleading signals to other market participants.
The exchange has also taken it into consideration that there are some indications that MLCE may have acted deliberately with the intent to improperly influence the trading of market participants.
For further information, please contact NASDAQ OMX Commodities:
Erik Korsvold, Head of Market Surveillance, NASDAQ OMX Oslo ASA, phone +47 6752 8067, erik.korsvold@nasdaqomx.com
Media contact:
Sara Aadnesen, Director Corporate Communications, phone +47 9060 0759, sara.aadnesen@nasdaqomx.com
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About NASDAQ OMX Commodities
NASDAQ OMX Commodities is the brand name for the NASDAQ OMX Group’s worldwide suite of commodity related products and services. The NASDAQ OMX Commodities offerings include power, natural gas and carbon emission markets and clearing services. NASDAQ OMX Commodities is a trademark of the NASDAQ OMX Group, Inc.
NASDAQ OMX Commodities Europe is the trade name of NASDAQ OMX Oslo ASA which is authorized as a commodity derivatives exchange by the Norwegian Ministry of Finance and supervised by the Norwegian Financial Supervisory Authority. All trades with NASDAQ OMX Commodities Europe are subject to clearing with NASDAQ OMX Clearing.
NOS Clearing ASA is the leading clearing house for the freight market and a specialist clearing provider to the commodities markets. The company is wholly owned by the NASDAQ OMX Group Inc. The clearinghouse, which is situated in Oslo, has more than 300 members.
NASDAQ OMX Clearing is the trade name of NASDAQ OMX Stockholm AB which is authorized and supervised as a multi-asset clearinghouse by the Swedish Financial Supervisory Authority in Sweden as well as authorized to conduct clearing operation in Norway by the Norwegian Ministry of Finance.
For more information, visit www.nasdaqomx.com/commodities
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