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AUS general regulatory requirements

The Corporations Act prohibits market manipulation, including orders or trades that: 

• Create an artificial price for trading in financial products (s1041A) 

• Create a false or misleading appearance of trading activity (s1041B)

• Artificially maintain trading prices (s1041C). 

The Act also prohibits insider trading (s1043A), which refers to buying or selling financial products while in possession of “inside information” (defined in s1042A). 

These are only some of the provisions of the Corporations Act that apply to your trading activity. We encourage you to seek independent advice as to whether particular conduct may breach the Act before placing orders if you are at all unsure. 

The ASIC Market Integrity Rules require a Market Participant (such as Finclear) to not do anything, or fail to do anything, which would result in a market not being fair and orderly (5.9.1). 

The MIRs also prohibit any Market Participant from placing any customer order that may create a false or misleading appearance of trading activity in, or market or price for, a financial product. 

A Market Participant is also required to consider whether, in the circumstances, that is the likely effect of the order (5.7.1). The circumstances that must be considered for this purpose are listed in 5.7.2, and include:

• Whether an order or the execution of an order would materially impact the price of a security
• The time at which an order is entered into the market, or any instructions provided that concern the time of order entry
• Whether an order is placed by a person on behalf of another person, or by a person who is known to be a related party to that person, may have an interest in creating a false or misleading appearance of active trading in a security
• Whether there appears to be a legitimate commercial reason in the submission of an order, unrelated to an intention to create a false or misleading appearance of active trading in a security
• The volume of an order placed by a person
• Whether a transaction, bid or offer that has executed or is in the market, would involve no change in beneficial ownership
• The extent to which a person amends or cancels an instruction to purchase and/or sell a security, relative to the number of share transactions executed for that person

Wall St general regulatory requirements 

The Securities Exchange Act prohibits market manipulation of security prices, with key provisions of the Act including Section 9(a) and Section 10(b). This includes; 

• Creating “a false or misleading appearance of active trading in any security other than a government security, or a false or misleading appearance with respect to the market for any such security” (1) 
• Engaging in a series of transactions that creates “actual or apparent active trading” has a material impact on a security’s share price “for the purpose of inducing the purchase or sale” (A)
• Knowingly spreading false information to materially impact a security’s share price (B).

The above is not an exhaustive list of the Securities Exchange Act provisions that apply to your trading activity. You’re encouraged to seek independent advice before placing orders if unsure as to whether particular conduct may breach the Act. 

The Nasdaq and NYSE Exchange Rules also impose requirements on Market Participants, in maintaining fair and orderly markets, through their conduct relating to order entry and trade execution. This includes the Market Conduct Rules from Nasdaq with application to Market Participants, and the NYSE’s Conduct Rules (Rules 2010 - 7470) for Market Participants.