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Dubai Financial Services Authority (DFSA): Contents

Dubai Financial Services Authority (DFSA)
Rulebook Modules
Authorised Market Institutions (AMI) [VER18/02-17]
Part 3 Licensing Requirements
Sourcebook Modules
Consultation Papers
Policy Statements
DFSA Codes of Practice
Amendments to Legislation
Media Releases
Financial Markets Tribunal

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(1 version)
Jul 14 2013 onwards

AMI 5.11.3 Guidance

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The definitive version of DFSA handbook text is the PDF version as that is the text of the instrument as made and published by the DFSA.

To view past versions of this module in PDF format, please visit the Archive.

1. An Authorised Market InstitutionG is subject to the requirements in the DFSA'sG AMLG module. MembersG of an Authorised Market InstitutionG which are Authorised FirmsG are also subject, by virtue of being Authorised FirmsG , to the requirements in the DFSA'sG AMLG module.
2. In determining whether an Authorised Market InstitutionG 's measures are adequate and appropriate to reduce the extent to which its facilities can be used for Market AbuseG , money laundering and financial crime, the DFSAG will consider:
a. whether the Authorised Market InstitutionG has appropriate staff, surveillance systems, resources and procedures for this purpose;
b. the monitoring conducted for possible patterns of normal, abnormal or improper use of those facilities;
c. how promptly and accurately information is communicated about Market AbuseG , financial crime and money laundering to the DFSAG and other appropriate organisations; and
d. how the Authorised Market InstitutionG co-operates with relevant bodies in the prevention, investigation and pursuit of Market AbuseG , money laundering and financial crime.
3. An Authorised Market InstitutionG shall have regard to Part 8 of the Markets Law in relation to Market AbuseG and the relevant provisions of the Regulatory LawG . Examples of practices that amount to market manipulation (which is one form of Market AbuseG ) in an automated trading environment that should be identified and prevented by an Authorised Market InstitutionG to promote Proper MarketsG include the following:
a. entering small orders in order to ascertain the level of hidden orders, particularly used to assess what is resting on a dark platform, known as Ping OrdersG ;
b. entering large numbers of orders and/or cancellations/updates to orders to create uncertainty for other market participants, slowing down their process and to camouflage its own strategy, known as Quote StuffingG ;
c. entry of orders or a series of orders intended to start or exacerbate a trend, and to encourage other participants to accelerate or extend the trend in order to create an opportunity to unwind/open a position at a favourable price, known as Moment IgnitionG ; and
d. submitting multiple orders often away from one side of the order book with the intention of executing a trade on the other side of the order book, where once that trade has taken place, the manipulative orders will be removed, known as Layering and SpoofingG .
Derived from RM118/2013 [VER15/07-13]