Disciplinary process can take an “unacceptable” time to stop manipulative behaviour, according to US exchange group Bats
Accusations of market manipulation can
spark years of legal investigations, court proceedings and
media speculation of wider manipulative practices, so a recent
proposal to increase an exchange group’s internal
powers to suspend those they suspect to be undertaking
manipulative behaviour, could lead to a market-wide increase in
The debate comes after equities exchange
group, Bats Global Markets last week filed its Client
Suspension Rule with the US Securities and Exchange Commission
The firm’s rule would enable
it to take swifter action to prohibit manipulative behaviour
across its exchanges, such as layering and spoofing - the
practice of placing an order with the intent of cancelling it
before it can be completed.
"Pending SEC approval, the Bats Client
Suspension Rule would allow Bats to stop ongoing manipulative
conduct in a matter of weeks, instead of the lengthier,
longstanding regulatory process that can take several years to
reach a final resolution," said the firm in a statement.
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