Market Manipulation

FP Markets: ASX DMA Trading

All industry participants (including FP Markets) have a legal obligation to ensure that the underlying markets are fair, orderly and transparent.

As FP Markets hedges its exposures to clients trades with its hedging counterparty(s) and that hedging counterparty(s) hedges its exposure to FP Markets in the underlying exchange market (where an exchange does exist), FP Markets clients should be aware that some trading practices by them can constitute market manipulation (as the trades are ultimately replicated in the underlying market by our counterparty).

Manipulating the market through creating a false or misleading market as regards price or the appearance of active trading is conduct prohibited under the Corporations Act. It is the client’s responsibility to be aware of unacceptable market practices and the legal implications. The “Market misconduct and other prohibited conduct” provisions are contained in Part 7.10 of the Corporations Act. These include the insider trading prohibitions.

It is recommended that clients read through the guidelines set out by ASIC and the ASX to understand the rules and potential consequences of breaching such rules. The below links will take you to the specific documents for ASX Trading.

ASIC Market Integrity Rules (ASX 24 Market)

ASX Operating Rules

FP Markets (and its clients) must:

Maintain an Orderly Market

FP Markets must ensure that trading by its clients is at all times consistent with maintaining an orderly market by ensuring it complies with such rules issued by both ASIC and the ASX.

It is recommended clients review ASX Operating Rules Section 3

Prevent Manipulative Trading

FP Markets must not deal in any product with the intention to create a false or misleading appearance of active trading.
It is recommended clients review ASIC Market Integrity Rules Chapter 3 Section 3.1.2

ASX/ASIC Disciplinary Action

The ASX and ASIC are able to take action, where it considers, that its rules have been breached.

Penalties can apply:

  • Against FPMarkets Hedge Counterparty
  • Against FP Markets
  • Against the client (you).

The Client may be liable for penalties to regulators such as ASIC or be liable to FP Markets for costs to FP Markets arising out of those trading practices of the client which lead to the client, FP Markets or any other person suffering loss or penalty.

If you have any questions or queries, please contact our desk on 1300 376 233 or email [email protected]

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