Facts of market manipulation in on-exchange trading for bonds of Spektr LLC, RIT LLC, Transbaltstroy LLC, and UAKhM-FINANCE OOO established
The Bank of Russia has carried out an investigation for compliance with the requirements of Federal Law No.
The transactions qualified as market manipulation were conducted by the following entities (hereinafter collectively, the Entities):
— professional securities market participants acting on their own behalf and at their own expense, namely IC Sparta-finans LLC (TIN: 7705941698), IC A Plus LLC (TIN: 7701864354), and O.K. Bank PJSC (TIN: 5249046404);
— legal entities, namely Aspect LLC (TIN: 7716711777), Energocenter LLC (TIN: 7710647885), Vecher LLC (TIN: 5904164594), and TIMFIN LLC (TIN: 7734616526);
— foreign legal entities, namely EASTMARK INVESTMENTS LTD (registered in compliance with the legislation of the Republic of Cyprus, Registration No. HE 351973) and CARDOSEN ENTERPRISES LIMITED (registered in compliance with the legislation of the Republic of Cyprus, Registration No. HE 285922).
Carrying out the transactions with the Bonds, the above Entities used a mechanism typical of transactions conducted in collusion, including highly synchronous offsetting orders with identical parameters issued by counterparties.
Conducting transactions with the Bonds, Energocenter LLC and Aspect LLC used trading accounts opened with various brokers, including foreign ones. In a number of cases, Energocenter LLC and Aspect LLC carried out such transactions with the Bonds where they simultaneously acted as both the buyer and the seller, which resulted in the so-called cross-transactions.
A considerable portion of the transactions with the Bonds conducted by the Entities caused significant deviations in the demand, supply, price, and volume of trading in the Bonds. Moreover, such transactions were giving the impression of trading activity and liquidity in the markets for the Bonds. On certain trading days, the percentage of the transactions conducted between the Entities reached 100% of the total amount of the transactions carried out on these days.
According to the findings of the investigation, the transactions conducted by the below listed entities in the markets for the Bonds are qualified as market manipulation pursuant to Clause 2 of Part 1 of Article 5 of the Federal Law:
— Spektr LLC (ISIN: RU000A0JW8G2) — IC Sparta-finans LLC, IC A Plus LLC, Energocenter LLC, Vecher LLC, TIMFIN LLC, CARDOSEN ENTERPRISES LIMITED, and O.K. Bank PJSC;
— UAKhM-FINANCE OOO (ISIN: RU000A0ZZ141) — EASTMARK INVESTMENTS LTD and O.K. Bank PJS;
— RIT LLC (ISIN: RU000A0JUQN2) — Aspect LLC and Energocenter LLC;
— Transbaltstroy LLC (ISIN: RU000A0JUJP2) — Aspect LLC and Energocenter LLC.
Pursuant to Clause 3 of Part 1 of Article 5 of the Federal Law, the transactions conducted by the below listed entities in the markets for the Bonds are qualified as market manipulation:
— Transbaltstroy LLC (ISIN: RU000A0JUJP2) — Aspect LLC and Energocenter LLC;
— RIT LLC (ISIN: RU000A0JUQN2) — Aspect LLC.
The Entities thus breached the ban imposed by Part 2 of Article 6 of the Federal Law. In this regard, the Bank of Russia has implemented the following measures:
— has cancelled the licences of professional securities market participants of IC Sparta-finans LLC and IC A Plus LLC;
— has sent orders to cease and desist from similar violations in the future to the companies operating as of the date of the disclosure of this press release, namely to Aspect LLC, Energocenter LLC, Vecher LLC, TIMFIN LLC, EASTMARK INVESTMENTS LTD, and O.K. Bank PJSC.
In addition, the Bank of Russia has decided to cancel the qualification certificates of a financial market specialist issued to Maxim A. Diakovsky and Alexandr O. Kim who conducted transactions qualified as manipulation in the market for the bonds of Spektr LLC (ISIN: RU000A0JW8G2) on behalf of IC A Plus LLC and IC Sparta-finans LLC, respectively.
Certain circumstances of the transactions with the Bonds were established owing to the Bank of Russia’s cooperation with the regulators of a number of financial markets in accordance with the Multilateral Memorandum of Understanding of the International Organization of Securities Commissions (IOSCO MMoU), namely with the Financial Conduct Authority, the National Bank of Slovakia, and the Cyprus Securities and Exchange Commission.
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