SWISS EXCHANGES FINE DUTCH FIRM FOR MISUSE OF TRADER IDENTIFICATION NUMBERS

Posted October 8, 2009

ZURICH – SIX Exchange Regulation has established that participant Flow Traders B.V., Amsterdam, violated SIX Swiss Exchange’s and Scoach Switzerland’s rules on the registration of traders and the use of trader identification numbers. As a result, the exchanges and the regulatory body have imposed a fine of 20,000 Swiss francs ($19,472) on the firm, along with a charge for the costs of investigative proceedings, of 8,500 Swiss francs ($8,291).

SIX Swiss Exchange and Scoach Switzerland participants must register all persons who have access to the exchange system in their capacity as traders with their exchanges, which allocate personal identification numbers to each registered traders. The participants must ensure that the personal identification numbers of its registered traders are not misused. If a provisionally registered trader has not acquired a trader license within a year, then SIX Swiss Exchange and Scoach Switzerland cancel the provisional registration. In such cases, the participant must block the trader in question's access to the exchanges immediately.

For a period of at least two weeks in 2008, a Flow Traders employee who was not registered as a trader used the personal identification number of a trader who was registered on both exchanges. Furthermore, the prices for a listed security that was not traded by that registered trader were set under that registered trader’s ID, even though the Surveillance & Enforcement department had previously informed the participant by telephone that this was not permitted.

In addition, the personal identification number of another registered trader, was also used by the four members of his team. None of these employees had their own trader ID from SIX Swiss Exchange or Scoach Switzerland at that time. Provisional trader registrations for three of the four had been cancelled because they had not acquired a trader license within a year.

The fourth employee became a registered trader on SIX Swiss Exchange and Scoach Switzerland only at a later date. Flow Traders therefore violated stock exchange rules on the registration of traders and the use of trader identification numbers.