1. Purpose
These Market Manipulation and Prohibited Conduct Rules establish the standards of conduct applicable to trading, order submission, market participation and related activities on the IDSX ("IDSX" or the "Exchange").
The purpose of these Rules is to:
- promote fair, orderly and transparent markets;
- protect the integrity of price formation;
- prevent artificial, misleading or deceptive trading activity;
- prohibit conduct intended to create false or misleading market signals;
- establish standards for the use of orders, algorithms and automated trading systems; and
- provide the Exchange with authority to investigate, restrict, suspend or take disciplinary action against prohibited conduct.
These Rules apply together with the IDSX General Rules, Trading Rules, Market Participant Rules and other applicable Exchange requirements.
2. Scope
These Rules apply to:
- Trading Participants;
- Brokers;
- Market Makers;
- Sponsors;
- Issuers where relevant to their market activity;
- clients trading through a Participant;
- beneficial owners of accounts;
- authorised representatives;
- employees, officers and agents of Participants; and
- any person or entity submitting, directing, controlling or benefiting from orders or transactions executed through IDSX.
A Participant remains responsible for activity conducted through accounts, systems, credentials or trading access under its control, subject to applicable law and the Exchange Rules.
3. General Standard of Market Conduct
No person shall engage in conduct that:
- creates or is likely to create a false or misleading appearance of trading activity, liquidity, demand, supply or market interest;
- creates or is likely to create an artificial price;
- improperly influences the price, volume or trading conditions of a security;
- misleads other market participants regarding genuine trading interest;
- interferes with the fair and orderly operation of the market;
- improperly exploits confidential, non-public or privileged information;
- circumvents Exchange controls, surveillance systems or trading restrictions; or
- assists, facilitates, coordinates or knowingly permits another person to engage in prohibited conduct.
The Exchange may consider the substance and economic effect of conduct rather than its form alone.
4. False or Misleading Appearance of Trading
A person must not enter into transactions or submit orders for the purpose, or with the effect, of creating a materially false or misleading appearance of:
- active trading;
- market liquidity;
- supply or demand;
- price movement;
- trading volume;
- investor interest; or
- the existence of genuine buying or selling pressure.
The Exchange may review patterns of activity across multiple accounts, Participants, wallets, beneficial owners, related parties or trading venues when determining whether activity is genuine.
5. Wash Trading
Wash trading is prohibited.
A wash trade includes a transaction, or series of transactions, in which there is no genuine change in beneficial ownership or economic exposure and which creates or may create misleading trading activity.
Prohibited activity may include:
- trading between accounts controlled by the same beneficial owner;
- coordinated transactions between related persons where there is no genuine transfer of economic risk;
- arranging matching buy and sell orders for the purpose of generating artificial volume;
- transferring securities between controlled accounts to influence reported activity; or
- using multiple accounts, entities or wallets to disguise common ownership or coordination.
Transactions between related parties are not automatically prohibited where they have a legitimate commercial purpose and result in genuine economic consequences. Participants must nevertheless be able to demonstrate the legitimate basis for such activity when requested by the Exchange.
6. Matched Orders and Pre-arranged Trading
A person must not coordinate, arrange or knowingly enter matching orders where the purpose is to:
- create artificial volume;
- establish or influence an artificial price;
- mislead other market participants;
- manipulate closing, opening or reference prices; or
- avoid Exchange surveillance or trading controls.
This Rule does not prohibit legitimate negotiated or crossing transactions expressly permitted under the Exchange Rules, provided that all applicable execution, reporting and transparency requirements are satisfied.
7. Spoofing
Spoofing is prohibited.
A person must not place one or more orders without a genuine intention to execute those orders where the purpose is to create a false impression of market depth, supply, demand or price direction.
Examples may include:
- entering large orders on one side of the order book to influence other market participants and cancelling them after obtaining an execution on the opposite side;
- repeatedly placing and cancelling orders to create artificial buying or selling pressure;
- displaying orders intended primarily to influence another trader or automated trading system rather than to trade; or
- using multiple accounts or Participants to disguise spoofing activity.
8. Layering
Layering is prohibited.
Layering includes submitting multiple orders at different price levels without genuine execution intent in order to:
- create a misleading appearance of market depth;
- influence the best bid or offer;
- move the market price;
- encourage other participants to enter, amend or cancel orders; or
- facilitate execution of another order at an advantageous price.
The Exchange may assess order entry, modification, cancellation and execution patterns together when determining whether layering has occurred.
9. Order Book Manipulation
No person may use orders, cancellations, modifications or trading instructions in a manner intended to distort the Exchange order book.
Prohibited practices may include:
- placing orders designed solely to alter displayed market depth;
- rapidly entering and cancelling orders without legitimate trading purpose;
- repeatedly moving orders to influence market quotations;
- submitting orders designed to trigger other participants' stop orders or algorithms;
- creating artificial bid-ask spreads;
- creating artificial imbalance in the order book; or
- coordinating activity across accounts to distort displayed liquidity.
10. Marking the Close
A person must not enter orders or transactions near the end of a trading period with the purpose of improperly influencing:
- the closing price;
- settlement values;
- reference prices;
- valuation calculations;
- index calculations;
- margin calculations; or
- any financial obligation linked to the closing price.
The Exchange may apply enhanced surveillance to trading occurring near market close or other relevant pricing events.
11. Marking the Open
A person must not enter orders or transactions before or during the opening process for the purpose of improperly influencing:
- the opening price;
- opening auction imbalance;
- reference prices; or
- subsequent market trading.
Orders entered during pre-open or opening periods must reflect genuine trading interest.
12. Price Ramping and Price Depression
A person must not engage in transactions or order activity designed to artificially increase or decrease the price of a security.
This includes conduct intended to:
- establish an artificial price level;
- create artificial price momentum;
- induce other persons to trade based on misleading price movements;
- support the price of a security without genuine market demand; or
- depress the price of a security for improper benefit.
13. Pump-and-Dump and Coordinated Promotion
A person must not participate in a scheme involving the artificial promotion of a security followed by the sale of holdings at prices influenced by that promotion.
Prohibited conduct may include coordination between security holders, promoters, issuers, brokers, market participants, social media operators, paid influencers or other persons where false, misleading or materially incomplete information is used to influence market activity.
Any paid or otherwise compensated promotion must comply with applicable disclosure requirements.
14. Short-and-Distort Conduct
A person must not disseminate false, misleading or materially incomplete information about an issuer or security for the purpose of causing or contributing to a decline in its price and benefiting from a short position or other economic exposure.
Legitimate research, commentary, criticism or investment opinion is not prohibited merely because it is negative, provided it is not knowingly false or misleading and complies with applicable disclosure requirements.
15. Misleading Statements and False Information
No person may knowingly or recklessly disseminate information that is materially false or misleading where the information is reasonably capable of affecting trading or the price of a security.
This includes information distributed through websites, social media, messaging platforms, research reports, investor communications, public announcements, online forums or other communication channels.
Corrections should be made promptly where materially incorrect information has been distributed and may affect the market.
16. Front Running
A Participant, employee, agent or associated person must not improperly trade ahead of a client order, issuer transaction, block transaction or other material order where that person possesses non-public information regarding the order.
Participants must maintain procedures reasonably designed to prevent misuse of confidential client order information.
17. Insider Trading and Material Non-Public Information
No person may trade, recommend trading, communicate trading instructions or assist another person to trade while improperly possessing material non-public information where such conduct is prohibited under applicable law or Exchange Rules.
Participants must maintain appropriate controls concerning:
- confidential information;
- information barriers;
- restricted lists;
- employee dealing;
- conflicts of interest; and
- access to issuer or client information.
18. Manipulation Through Multiple Accounts
The use of multiple accounts, legal entities, brokers, wallets or beneficial owners does not prevent the Exchange from treating activity as coordinated where evidence indicates common control, common economic interest or coordinated conduct.
The Exchange may aggregate activity based on factors including beneficial ownership, common controllers, account authority, funding sources, withdrawal destinations, wallet relationships, order timing, device or system identifiers, trading strategies and other relevant connections.
19. Cross-Market Manipulation
A person must not use activity in another market, trading venue, derivative, token, security or related instrument for the purpose of manipulating trading on IDSX.
Similarly, a person must not use IDSX activity to improperly influence the price or market conditions of a related instrument traded elsewhere.
The Exchange may cooperate with other trading venues, regulators, market operators or service providers where permitted by law and appropriate for market surveillance or investigation.
20. Manipulation Involving Related Digital Assets
Where a security traded on IDSX is represented, settled or recorded using distributed ledger technology or other digital infrastructure, a person must not use transfers, wallet movements or related digital asset transactions to:
- conceal beneficial ownership;
- create artificial transaction activity;
- disguise coordinated trading;
- circumvent trading restrictions;
- evade position or ownership controls; or
- interfere with Exchange surveillance.
On-chain activity may be considered together with Exchange order and transaction data.
21. Token Transfers Outside the Exchange
Where IDSX permits securities or security tokens to be transferred outside the Exchange's trading environment, such transfers remain subject to applicable transfer restrictions, ownership requirements, KYC/AML controls and securities laws.
A Participant or account holder must not use an external transfer for the purpose of transferring securities to an ineligible or unidentified person, avoiding beneficial ownership disclosure or market surveillance, facilitating prohibited trading, circumventing transfer restrictions, or concealing the source or destination of securities.
The Exchange may restrict, delay, reject or require additional verification for transfers where necessary to protect market integrity or comply with applicable requirements.
22. Manipulation Using Automated Trading Systems
The use of algorithms, APIs, bots or automated trading systems does not reduce responsibility for compliance with these Rules.
A person must not design, deploy or operate an automated strategy intended to spoof, layer, create artificial volume, manipulate prices, overload Exchange systems, interfere with other participants' access to the market or exploit Exchange systems in a manner inconsistent with fair and orderly trading.
Participants providing automated or API-based access must maintain appropriate controls over such activity.
23. Excessive Order Entry and Cancellation
High levels of order entry, modification or cancellation are not prohibited by themselves.
However, the Exchange may investigate activity where the pattern, frequency or context suggests that orders are being used primarily to mislead the market, interfere with the order book, create artificial liquidity, manipulate other participants' trading decisions or impair Exchange systems.
Participants may be required to demonstrate the legitimate trading purpose of such activity.
24. System Abuse
No person may intentionally:
- overload or disrupt Exchange systems;
- submit messages primarily intended to impair system performance;
- exploit technical errors or system vulnerabilities;
- interfere with market data distribution;
- obtain unauthorised access to another person's trading systems or accounts;
- circumvent trading controls, limits or suspensions; or
- use Exchange technology for fraudulent or manipulative purposes.
Technical vulnerabilities identified by a Participant should be reported promptly to IDSX and must not be exploited.
25. Self-Trading
Participants must maintain controls reasonably designed to prevent unintended self-trading where the same beneficial owner is on both sides of a transaction.
Self-trading may be investigated where it occurs repeatedly, creates artificial volume, has no legitimate economic purpose, is intentionally structured to match, or may mislead the market.
IDSX may provide self-trade prevention functionality or require Participants to implement equivalent controls.
26. Manipulation of Low-Liquidity Securities
Additional scrutiny may apply to securities with limited public float, low trading volume, concentrated ownership, limited numbers of active market participants or unusually high price volatility.
Participants must exercise particular care where relatively small orders or transactions could materially influence the market price.
27. Market Maker Conduct
A Market Maker must not misuse its market-making role to manipulate the market. A Market Maker must not:
- publish quotations that it does not genuinely intend to honour, subject to permitted quotation amendments and cancellations;
- use market-making activity to create artificial prices;
- coordinate quotations with another Market Maker for an improper purpose;
- misuse confidential client or issuer information;
- create artificial volume through controlled accounts; or
- use its position to disadvantage other market participants through deceptive trading practices.
Nothing in this Rule prevents legitimate inventory management, hedging, spread management or risk management undertaken in accordance with the Exchange Rules.
28. Issuer-Related Market Activity
An Issuer and its directors, officers, controlling shareholders and related persons must not directly or indirectly engage in activity intended to create artificial trading conditions in the Issuer's securities.
Any permitted issuer repurchase, liquidity programme, stabilisation arrangement or similar activity must comply with applicable law and the relevant IDSX Rules.
29. Beneficial Ownership and Related-Party Disclosure
Participants must maintain sufficient information to identify the beneficial owner and controller of accounts in accordance with applicable requirements.
The Exchange may require information concerning beneficial ownership, account control, related parties, source of funds, source of securities, wallet ownership, trading authority and relationships between accounts.
Failure to provide requested information may result in trading restrictions, account suspension or other action permitted under the Exchange Rules.
30. Participant Surveillance Obligations
Participants must maintain appropriate systems, controls and procedures to identify potentially manipulative or prohibited activity conducted through their systems.
Such controls should be proportionate to the Participant's business and may include monitoring for unusual order cancellation ratios, self-trading, wash trading, matched orders, rapid price movements, unusual volume, layering, spoofing, coordinated accounts and suspicious activity near opening or closing periods.
Participants must investigate alerts appropriately and maintain records of material reviews.
31. Reporting Suspicious Activity
A Participant that identifies activity that may constitute market manipulation, fraud or another serious breach must promptly escalate the matter internally and, where required, report the matter to IDSX and relevant authorities.
Reports should include available information concerning relevant accounts, beneficial owners, orders, transactions, timing, communications, associated wallets and the reason the activity is considered suspicious.
A Participant must not improperly disclose the existence of a confidential investigation or report where disclosure is prohibited by law.
32. Recordkeeping
Participants must maintain records sufficient to reconstruct relevant trading activity, including where applicable orders, order modifications, cancellations, executions, client instructions, account ownership information, algorithm identifiers, API activity, communications and relevant system logs.
Records must be retained for the period required under applicable law, Exchange Rules or Participant requirements.
33. IDSX Market Surveillance
IDSX may monitor activity using automated and manual surveillance methods.
Surveillance may include analysis of order book activity, executed transactions, account relationships, beneficial ownership, market concentration, order-to-trade ratios, cancellation patterns, cross-account activity, wallet and settlement information where available, public communications and activity across related markets where relevant information is lawfully available.
An alert generated by a surveillance system does not by itself establish a violation. Alerts may be subject to further review and investigation.
34. Investigation Powers
Where IDSX identifies potential prohibited conduct, the Exchange may, subject to its Rules and applicable law:
- request information or explanations;
- require production of trading records or communications;
- request beneficial ownership information;
- review related accounts and transactions;
- require information concerning automated trading strategies;
- restrict particular orders or trading activity;
- impose enhanced monitoring;
- suspend trading access;
- refer matters to relevant authorities; or
- take other action reasonably necessary to protect market integrity.
Participants must cooperate with Exchange investigations in accordance with applicable Exchange Rules.
35. Immediate Market Protection Measures
Where IDSX reasonably considers that activity may threaten the fair and orderly operation of the market, it may take immediate protective measures.
Such measures may include cancelling orders, rejecting new orders, restricting an account or Participant, imposing order or position limits, suspending trading in a security, adjusting applicable trading controls, requiring additional verification, or temporarily restricting withdrawals or transfers where permitted and necessary under applicable rules.
Protective measures do not necessarily constitute a finding that a Rule violation has occurred.
36. Disciplinary Action
A breach of these Rules may result in disciplinary action under the IDSX disciplinary framework.
Depending on the circumstances, action may include a warning, formal notice, enhanced supervision, trading restrictions, cancellation or correction of orders or transactions where permitted, suspension, termination of Participant status, referral to regulatory or law enforcement authorities, or other measures permitted under the Exchange Rules.
The severity of action may take into account the seriousness, duration, intent, market impact, financial benefit, recurrence and degree of cooperation involved.
37. Attempted Manipulation
A completed transaction is not required for conduct to breach these Rules.
An attempt to engage in manipulation, including submission of orders that are cancelled or remain unexecuted, may constitute a violation where the circumstances demonstrate manipulative or deceptive intent.
38. Assistance and Facilitation
A person must not knowingly assist, arrange, finance, facilitate, conceal or enable conduct that would constitute a breach of these Rules.
Participants must take reasonable measures to prevent their systems, accounts and access arrangements from being used for prohibited conduct.
39. Legitimate Trading Activity
These Rules are not intended to prohibit legitimate trading activity, including genuine market making, bona fide hedging, portfolio rebalancing, liquidity management, arbitrage, risk management, legitimate block transactions or genuine investment activity, provided that such activity is conducted in accordance with applicable law and Exchange Rules and is not structured or carried out for a manipulative or deceptive purpose.
40. Assessment of Conduct
When assessing whether conduct may breach these Rules, IDSX may consider all relevant circumstances, including the person's trading pattern, order size and frequency, order placement and cancellation behaviour, execution history, beneficial ownership, relationships between accounts, market liquidity, timing of orders, market impact, communications, economic purpose, automated trading parameters and any other information relevant to determining the nature and purpose of the activity.
No single factor is necessarily determinative.
41. Cooperation with Authorities
IDSX may cooperate with regulators, law enforcement agencies, other market operators, financial institutions and other competent authorities where permitted or required by applicable law.
Such cooperation may include the sharing of information relating to suspected market manipulation, fraud, insider trading, money laundering, sanctions violations, cybercrime or other unlawful market activity.
42. Interaction with Other IDSX Rules
These Rules should be read together with the IDSX General Rules, IDSX Trading Rules, IDSX Market Participant Rules, IDSX Market Maker Rules, IDSX Listing Rules, IDSX Trading Suspension and Resumption Rules, IDSX Disciplinary and Enforcement Rules, applicable market surveillance procedures, and applicable laws and regulatory requirements.
Where another IDSX Rule imposes a more specific requirement, that requirement applies in addition to these Rules.
43. Exchange Interpretation
IDSX may issue guidance, notices, technical standards, surveillance parameters or interpretative materials concerning these Rules.
Such materials may clarify how the Exchange applies these Rules to new trading practices, technologies, automated strategies or market structures.
44. Amendments
IDSX may amend these Rules from time to time in accordance with the Exchange's governance framework and applicable regulatory requirements.
The current version will be published through the official IDSX website or other designated publication channel.
45. Contact
Questions concerning these Rules, market conduct or the reporting of suspected market manipulation may be directed to:
Market Regulation IDSX Email: [email protected]
For urgent matters affecting market integrity, Participants should use the designated IDSX market supervision contact channel.
Effective Date: [●] · Version 1.0