On establishing fact of unit market abuse of RCU Credit CUIF
The Bank of Russia established a fact of repeated and continuous abuse of the market of investment units of Russian Credit Union, closed-end credit unit investment fund (RCU Credit CUIF) from November 2011 till September 2013.
The market of RCU Credit CUIF was almost completely created artificially by a group of interconnected individuals and legal entities having ties with MFUND LLC, the management company of RCU Credit CUIF. Most transactions with investment units of RCU Credit CUIF at the CJSC MICEX SE were effected by prior arrangement between OJSC INVESTMENT INTERREGIONAL FUEL AND ENERGY COMPANY, CJSC Portfolio Investment Company, OJSC Bank Narodniy Credit, and Mr. R.M. Mironov. These entities and the individual maintained trading activity and quotations of investment units of RCU Credit CUIF through preliminary stipulated transactions. At most trading sessions, mutual transactions of these persons made up to 100% of the daily traded value of RCU Credit CUIF.
At the same time it worth mentioning that on certain days OJSC INVESTMENT INTERREGIONAL FUEL AND ENERGY COMPANY acted not only as a party acting in its own interests, but also as a trading participant acting on behalf and at the expense of its customers CJSC Portfolio Investment Company and OJSC Bank Narodniy Credit on the basis of broker agreements.
Considering the interconnection between OJSC INVESTMENT INTERREGIONAL FUEL AND ENERGY COMPANY, CJSC Portfolio Investment Company and OJSC Bank Narodniy Credit through a number of individuals and legal entities and the lack of transactions with investment units of RCU Credit CUIF at the CJSC MICEX SE effected by other participants, it was revealed that OJSC INVESTMENT INTERREGIONAL FUEL AND ENERGY COMPANY acted in the interest of its customers CJSC Portfolio Investment Company and OJSC Bank Narodniy Credit by prior arrangement.
Pursuant to Clause 2 of Part 1 of Article 5 of Federal Law No.
Market abuse is a gross violation of the requirements of the Russian legislation and the violation of the professional conduct of financial market participants.
The Bank of Russia took a decision to cancel licences to carry out professional activity in the securities market of the legal entities, professional securities market participants, which abused the market of investment units of RCU Credit CUIF.
Qualification certificates of financial market specialists of officials involved in transactions implemented by professional securities market participants which resulted in the abuse of the market of investment units of RCU Credit CUIF, were cancelled.
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12.11.2014 00.00.00