Indicators of manipulative behaviour

Published on January 23, 2023 by Market Abuse Centre

For the purpose of performing market monitoring or trade surveillance one is recommended to consider particular indicators. These indicators should be considered irrespective of whether monitoring or surveillance is performed manually or automatically. In other words, both human beings and detection systems are adviced to consider indicators.

If an indicator applies to an act, it does not automatically mean that this act constitutes market manipulation. Moreover, it just a factor that should be taken into account when transactions or orders to trade are examined. Obviously, when multiple indicators apply to the same situation, it makes the situation require more attention. It is likely to lead faster to classify such an act as ‘suspicious’. The more indicators apply, the stronger the alert. Nevertheless, in these cases, it is not per se illegal acting. False ‘positives’ just appear due to complexity.

It must be noted that the list of indicators is non-exhaustive. First of all, because there is no end at any point in time, but also because (over time) market structures change and other strategies are applied, as well as new techniques.

An example of an indicator of manipulative behaviour (relating to false or misleading signals and to price securing) concerns the extent to which orders or transactions by a party represent a significant proportion of the daily volume of transactions in the relevant product. Even more so when those activities lead to a significant change in the prices of that product.

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