06 June 2018, 18:47 / Finance

The Central Bank will make a deal with manipulators

The regulator is seeking such a right to better combat violations by Alexander Astapenko

Now the Central Bank cannot, in exchange for cooperation, reduce or cancel the fine for market participants suspected of manipulation or using inside information / Evgeniy Razumny / Vedomosti

In the next three years, the Central Bank wants to legislate the right of insiders and market manipulators to make a deal with the regulator. This is stated in the draft “Main Directions for the Development of the Financial Market for 2019-2021”, published on the Central Bank website.

Now the Central Bank cannot, in exchange for cooperation, reduce or cancel the fine for market participants suspected of manipulation or using inside information. The deal with the regulator will help “accelerate the investigation of offenses, and will also help bring a wider range of people to justice,” the Central Bank document says. The regulator also wants to expand the scope of application of professional judgment when qualifying actions in the financial market.

The idea of enshrining the institution of transactions with the regulator in legislation is not the first year. First Deputy Chairman of the Central Bank Sergei Shvetsov spoke about this in an interview with Reuters in 2016.

The Central Bank can gain access to telephone conversations of insiders

Finance/Markets

The investigation of each case in the market takes up to two years, because foreign organizations also participate in manipulation or insider trading, he explained. “As a rule, the organization itself may not be aware that employees are engaging in insider trading. The share of this business in the organization’s total business volume may be very small, but the reputational damage is high,” he said. Reducing reputational damage may be one of the arguments to make a deal with the regulator, he added.

It really takes the regulator a lot of time to investigate such transactions. At the end of May, the Central Bank announced that it had discovered an insider during the sale of Lukoil's foreign currency earnings in December 2015. Kirill Semashkin, who acted in the interests of the Cyprus investment company Ronin Europe Ltd., bought currency at a reduced price thanks to information he received from a Lukoil employee » Alexey Bessonov, the Central Bank reported. They managed to earn 146 million rubles from such transactions. Ronin Europe Ltd. He denied the regulator's accusation.

Another case, which the Central Bank reported in mid-April, concerns transactions carried out in 2016 to 2018. The scheme of Finam client, trader Elvis Marlamov, was based on the use of autofollowing, which allows you to automatically copy the actions of the selected manager. According to the Central Bank, Marlamov opened a position through his isolated account, then after 1-1.5 minutes he opened a position using an auto-following account, after which the securities were bought by subscribers of his strategies. Securities quotes grew, and Marlamov closed the position on his isolated account. Thus, he received an income of 8 million rubles. Marlamov told Vedomosti that he did not make insider transactions.