Along with providing proper guidance to traders about how to trade and document their trading behavior, it is essential that companies invest in comprehensive surveillance systems. Watch the presentation or visit us for more information at https://bit.ly/3jIpIK3

1. REMIT best practices: transactions involving
fictitious devices or deception

2. In this, we’ll dive into additional types of transactions that can artificially
affect the perceived value of particular wholesale energy stocks, driving them
up so as to gain an illegal advantage for the fraudster traders who
participate.
Here’s what you need to know about them — and the best practices when it
comes to stamping them out.

3. Scalping and pump-and-dump
Another common form of deceptive trading that falls under
this banner is a “pump and dump” scam. This is a type of
securities fraud in which the price of an owned stock is
inflated through false information so that the stock can then
be sold at a significantly higher price than it was purchased
at.
Common communication channels used by fraudsters in a
pump and dump scheme could involve anything from social
media messaging to spam email, potentially containing bad
data. If the pump and dump scheme works as planned,
other market participants buy into the misleading
information and invest in the wholesale energy product,
thereby driving up its price. (Hence “pumping” up the price
and then “dumping” the stock.)

4. Circular trading and pre-
arranged trading
This is damaging because it artificially manipulates the
market by making it appear that certain security has
liquidity, suggesting there is market interest in a stock
where they might be none. This trading can cause more
investment in a stock because others could buy into it
thinking there must be a legitimate reason for the interest
and activity.
Yet another fictitious trading technique is pre-arranged
trading. In this practice, two commodity dealers trade
with each other at pre-arranged prices. This kind of
trading can be used to gain a tax advantage or exclude
others from the market. It can fraudulently limit risk and
be more profitable to the dealers at the expense of the
open market.

5. All banned under REMIT
All of these types of trades in the wholesale energy market
fall under the heading of price positioning. They have
banned under REMIT Article 5 rules stating that “Any
engagement [by a participant in the market] in any
attempt to engage in, market manipulation on wholesale
energy markets shall be prohibited.”
Although REMIT rules have been in place since the close of
2011, relatively little action was taken for the initial seven
years. That is rapidly changing now as a result of increased
enforcement and reporting of suspicious behavior by
ACER, Europe’s Agency for the Cooperation of Energy
Regulators.

6. Compliance is mandatory
By law, companies must comply with REMIT rules.
Penalties are not only leveled at individual traders
involved with the smooth running of the European
wholesale energy markets but also the companies
they work for. They must be monitoring at all times
to ensure compliance — and in a position to provide
information about regulatory compliance at a
moment’s notice.

7. Along with providing proper guidance to traders about how to
trade and document their trading behavior, it is essential that
companies invest in comprehensive surveillance systems. And
that they do it before any kind of potentially costly investigation
has to be launched. Millions of dollars in fines make the cost of an
effective surveillance system look minuscule by comparison.

8. Contact Us
info@shieldfc.com
97235685587
https://www.shieldfc.com/

9. Thank You