As a point of interest, I’ve been brushing up on ASIC’s rules around market misconduct.
Reading the forums I see common themes of manipulation in certain stocks. (Just run advanced HC search on Layering, Spoofing, Churning, marking, painting....)
Although they do mention cases that have seen prosecution, and I do know for a fact that a lot of what goes on is not made public, they also say “the challenge will be in detecting and proving in court that an offence has been committed to the standard required by the legislation.”
Is it simply a lack of technical capability or do the just ‘let it slide’?
Today even retail traders can write their own DMA linked software’s (via ALE capabilities) as well as screen scrapers for those more savvy. This facilitate transaction recording to a database - basically storing a copy of the historical order book including every order & when it was placed, pulled or executed by timestamp.
With a small amount of simple code, you can convert this to a horizontal stacked bar chart with logic to highlight rounded trade-match sized parcels in different colour.
Intraday movements can then be played back like a video to watch the orders move around.
A little more code and you can programmatically identify which transactions relate to the same trader/algo via timestamp and size correlations.
Combine this with ASIC’s access to the ASX/Chi-X order book records and they have the transaction numbers & linked accounts which equals the broker then HIN. Should a brokers DMA customer be performing illegal activity, it would be traced to the broker & it would be a given that they would roll over.
Macro’s could then perform auto surveillance across the entire market and even auto request data from ASX/Chi-X.
If anyone has experience or knowledge in this area to pick holes in my logic I welcome your input.
