On establishing facts of manipulation in the market for ordinary shares of PJSC GC TNS energo (25.12.2018)

Source: Central Bank of the Russian Federation in English

Information Notice
On establishing facts of manipulation in the market for ordinary shares of PJSC GC TNS energo
The Bank of Russia has established multiple cases of manipulation in the market for ordinary shares of PJSC GC TNS energo (hereinafter, the Shares) conducted by the clients of OJSC Brokerage House UNITY TRUST from 23 April 2017 to 15 November 2017.
It was established that OJSC Brokerage House UNITY TRUST, being the market maker in the Shares market, engaged its clients, Glestimon Management Limited (incorporated under the Cyprus law) and CJSC Management Company UNITY TRUST, to perform market maker functions. Mutual transactions conducted between the two companies, interconnected with OJSC Brokerage House UNITY TRUST, caused substantial deviations in the Shares trading parameters and allowed them to maintain price and trading volume of the Shares at the artificially created level.
It should be noted that the provisions of Clause 3, Part 3, Article 5 of Federal Law No. 224-FZ, dated 27 July 2010, ‘On Countering the Misuse of Insider Information and Market Manipulation and Amending Certain Laws of the Russian Federation’ (hereinafter, the Federal Law), do not apply to Shares trading conducted by Glestimon Management Limited and CJSC Management Company UNITY TRUST, as these companies were clients of the market maker and not parties to the market maker agreement.
Thus, transactions by Glestimon Management Limited and CJSC Management Company UNITY TRUST, coordinated by their interconnected company, OJSC Brokerage House UNITY TRUST, which did not exercise due internal controls over its clients’ operations, are qualified as manipulation in the Shares market, breaching Part 2 of Article 6 of the Federal Law.
The Bank of Russia reminds that it is prohibited to engage in such practices when executing market maker agreements.
The Bank of Russia took administrative measures with respect to the persons engaged in market manipulation, aimed at preventing such violations in the future.

25 December 2018
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MIL OSI