Cross-market manipulation under the microscope

Regulatory surveillance functions and capabilities are evolving to monitor for market abuse risks spanning multiple contracts and products across separate trading venues. Marlene Haas and Greg Leonard explore the developing landscape of EU, UK and US cross-market surveillance and enforcement.

Marlene Haas is a manager at Cornerstone Research in Washington, DC. Greg Leonard is a vice president at Cornerstone Research in London. The views expressed in this article are solely those of the authors, who are responsible for the content, and do not necessarily represent the views of Cornerstone Research or any of its clients. The authors wish to thank Hayley Barton, Samita Kamath and Ian Yanusko of Cornerstone Research for their valuable research and comments.

European regulators recently announced plans to step up their focus on cross-market manipulation surveillance under the Market Abuse Regulation (MAR). In a cross-market manipulation scheme, traders are alleged to place orders or to trade in one financial product with the intent of impacting the market of a related product or the same product traded on a different venue.