Federal Register:Prohibition of Market Manipulation

From Markets Reform Wiki
Jump to navigation Jump to search
Gavel.png FINAL RULE: This page refers to the proposed rulemaking on the anti-manipulation and ant-fraud. The CFTC final rule was issued at its July 19 open meeting.
Dodd-Frank Timeline, Proposed Rule Regarding Prohibition of Market Manipulation
Proposal Date Final Rule Effective Date
November 3, 2010 July 14, 2011 August 15, 2011

Comment letters pertaining the proposed rulemaking can be found here.

The Proposed Rule[edit]

On October 26, 2010, the Commodity Futures Trading Commission (CFTC) held its third in the series of open meetings to consider the issuance of proposed rulemakings under the Dodd-Frank Act. One of the agenda items was a proposed rule regarding the prohibition of market manipulation.<ref>Open Meeting on Third Series of Proposed Rules under the Dodd-Frank Act. CFTC. Retrieved on March 3, 2011.</ref>

One of the provisions of the Dodd-Frank Act expands the authority of the CFTC to prohibit fraudulent and manipulative behavior, such as disclosure of non-public behavior, false or misleading reporting, and "other manipulation." In the proposal, the commission prohibits any registered entity from:

  • using or employing any device, scheme, or artifice to defraud;
  • making untrue or misleading statement of material fact, or omit to state a material fact;
  • engaging in fraudulent activity;
  • delivering false or misleading reports;
  • manipulating or attempting to manipulate the price of a swap or commodity.

The proposal specifically refers to certain practices on electronic trading platforms, such as "buying the board" in an illiquid market, "spoofing," and other practices that may be viewed as manipulative. The final rule will attempt to differentiate legitimate commercial activity from tactics specifically designed to manipulate the market.

The entire proposal, as it appeared in the Federal Register on November 3, 2010, can be found below.



MarketsReformWiki Sponsors

RSM US LLP ADM Investor Services Cinnober Fidessa