Promoting Market Integrity
When you partner with SMARTS for your market surveillance systems requirements you are joining a unique global community. This community of exchanges, regulators and brokers worldwide is committed to promoting the integrity of the markets in which they participate.
Securities markets today are governed by rules and regulations, which are aimed to prevent or outlaw behavior that is seen as unfair or disorderly. Insider trading is the most commonly known violation of market integrity, but there are plenty of others, such as manipulative or misleading order or trade behavior, or trading against the interest of one’s own customer.
Broadly, rules and regulations governing securities markets can be classified into three categories:
1. Securities Legislation
Rules and regulations imposed through national laws, applying to all markets operating under the relevant jurisdiction. These are generally monitored and enforced by the relevant national securities regulator.
2. Market Rules
Rules imposed by exchanges and other trading venues with the aim to ensure market integrity. These rules are generally monitored and enforced by the market operator imposing them.
3. Firm trading rules
Rules imposed by a stockbroking firm on its traders, with the aim of ensuring compliance with points 1 and 2 above, as well as to limit risks of exposure from trading to the firm and its customers.
Ultimately, the aim in each case is to ensure individual agents acting on the markets do not create an unfair advantage for themselves at the expense of others, or disadvantage others through disorderly trading.