On the subject of amarket busi comes the ok from the Senate Finance Committee for the identification – on a proposal from the European Parliament and the EU Council – of new attitudes that can manipulate the negotiations. Indeed, the commission unanimously approved a resolution on the EU proposals on the abuse of privileged information and market manipulation.
The proposals of the European Parliament and of the Council in particular do reference to operations or orders transmitted automatically on the basis of specially prepared software (algorithmic trading) and which leverage the increasingly high order transmission speed allowed by the markets (high frequency trading). The use of such software is lawful and widespread, what would be explicitly prohibited instead is the transmission of orders in the market based on such algorithms which, instead of being aimed at executing operations, is aimed at delaying or blocking the functioning of the market (so-called stuffing), or to flood the trading platform with a large number of orders so as to make it difficult for other operators to participate in the market (so-called layering) or, in any case, to provide them with a false or misleading representation of the question and on the offer relating to the financial instrument (so-called spoofing).
On the basis of what was revealed by Consob in the hearing, the Finance Commission of Palazzo Madama favorably evaluates the definition of these examples "because they constitute useful points of reference in the still uncertain evaluation of topics relating to growing operations through algorithmic trading”. That said, "however, it would be more consistent with the approach of the market abuse discipline for the examples indicated to be based on the effects that the conduct would produce on the market rather than on the intentionality of the operator or, in this case, of the software ”.
More generally, with respect to the broader question of control, also to avoid market abuse and manipulation of trading, the Commission suggests evaluating, borrowing the prescriptions contained in the Borsa Italiana regulation, the introduction of a penalty for traders when of certain thresholds of orders entered and then cancelled, considering that this practice can influence trading progress incorrectly.
