Brett,
A little evidence.
There is a number of issues since the JORC Announcement for CDU on the 18th August, 2010, that have had a trading impact in the market and on the share register by institutional shareholders.
Cartel concerns are one of these issues.
The trading of sophisticated institutional investors since the JORC has had the hallmarks of a cartel controlling all aspects of trading.
Statistics show that 5 institutional shaeholders accounted fo 70% of all registry activity over some 30 months.
An example, In the first 6 months of 2012, the figure was 85% of all registry activity.
2 institutional shareholders in their own right accounted for 50% of all registry activity over the 30 months.
An example, In the first 6 months of 2012, the figure was 70% of all registry activity.
Institutional dealings were characterised by high levels of churn with shares being passed back and forth between each other resulting in extraordinary registry flows.
Two examples,
Citicorp Nominees,
124,057621 off; 123,164,692 on; -892,939 net.
National Nominees,
99,615,582 off; 99,639309 on; 23,777 net.
The symmetry of share flows and the ease by which large volumes of selling and buying had been accommodated by the market are difficult to reconcile with genuine trading. This suggests that the market had been dominated by fund managers pursuing suspicious investment objectives.
The Registry activity included trades that occurred on the ASX and subsequently settled, but it also included trades that occurred away from the ASX such as through Dark Pools.
The system of trading and settlements showed that, while supposedly fluid and transparent, only 27.6% of the buying and selling by brokers over a 30 month period were able to be reconciled with the register against the shareholders they had acted for. Trades that did reconcile were generally associated with retail investors.
It seemed the lack of transparency was because most trades were executed in the market by brokers and then forwarded to other agents for settlement and mainly in favour of institutions. The links between client and broker were completely obscured in the process. In fact, many of the trades also represented wash trades, that didn't even make it to the register.
cheers,
Max
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