Facts of market manipulation in transactions with certain derivatives and stock market instruments on Moscow Exchange established
Based on the findings of an investigation, the Bank of Russia has established facts of market manipulation by a group of persons, namely by LLC NKK-Paritet, LLC Invest-Profi, LLC InvestAlyans, V.A. Matytsyn, and O.R. Kasimov (hereinafter, the Persons). Over the period from 14 January 2020 through 29 May 2023 (hereinafter, the Period), they conducted reciprocal transactions with a number of derivatives1 and stock2 market instruments (hereinafter, the Financial Instruments) on Moscow Exchange.
During the Period, the Persons predominately chose low-liquidity financial instruments and placed matching orders to conduct transactions with the Financial Instruments with minimal time intervals between them. In most cases, the parameters of the matching orders were identical in terms of the price and amount of the Financial Instrument. This scheme minimised the possibility of a Person’s orders being executed by any counterparty other than the Persons. The transactions conducted by the Persons caused significant deviations in the trading parameters (trading volume).
Taking into account the above trading mechanism and the solid relationships between the Persons, it appears that the Persons acted in collusion. Pursuant to Clause 2 of Part 1 of Article 5 of Federal Law No. 224-FZ,3 these actions are qualified as market manipulation.
Thus, LLC NKK-Paritet, LLC Invest-Profi, LLC InvestAlyans, V.A. Matytsyn, and O.R. Kasimov violated the prohibition on market manipulation stipulated by Part 2 of Article 6 of Federal Law No.
Following the investigation, the Bank of Russia has sent binding orders to the Persons to cease and desist from similar violations in the future.
The Bank of Russia emphasises that market manipulation, including conducting transactions in collusion in an anonymous trading environment, is prohibited. Transactions with prearranged counterparties may be conducted in trading modes where parties to a transaction can only place direct orders (addressed to a particular trading participant).
1 Futures contracts:
- for metals: palladium (PLD-3.20, PLD-9.20, and PLD-3.22), platinum (PLT-9.21, PLT-12.21, PLT-3.22, and PLT-6.22), aluminium (ALMN-3.22, ALMN-5.22, and ALMN-8.22), nickel (Nl-3.22), zinc (Zn-3.22 and Zn-4.22), and silver (SILV-6.22 and SILV-12.22);
- for natural gas (NG-2.21);
- for exchange rates: EUR/RUB (Eu-6.21), CNY/RUB (CNY-9.22), and USD/RUB (Si-12.23);
- for ordinary shares of: VTB Bank (PJSC) (VTBR-6.22), Polymetal International plc (POLY-9.22), and Surgutneftegas PJSC (SNGP-9.22);
- margin call option on futures contracts: for USD/RUB (Si-9.22M180822CA49500 and Si-9.22M180822CA50500).
2 Ordinary shares of: PJSC EL5-Energo (ELFV), PJSC SFI (SFIN), PJSC LUKOIL (LKOH), VTB Bank (PJSC) (VTBR), and Sberbank (SBER); preference shares of Surgutneftegas PJSC (SNGSP).
3 Federal Law No.
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