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Companies watching every trade through SMS program

Companies watching every trade through SMS program

Stock market investors are the subject of intense harassment and at the mercy of price manipulation due to a sophisticated Shares Management System (SMS) programme that monitors every trade on the Cyprus Stock Exchange and relays the information to the listed companies within minutes of the trades occurring.

Brokers and investors are furious at the fact that all listed companies have access to the SMS system and by monitoring trades happening on their stocks, they immediately place calls to brokers and the beneficiary investors who are either buying or selling.

“If you dare to sell, they will call you to ask why the particular investor is selling and if your answer is wrong, then all the buy orders will suddenly vanish from the screen. If you are buying for account of a client the listed companies don’t like, then all of a sudden, all the sell orders will disappear,” a broker who wished to remain anonymous told the Financial Mirror.

The broker said he had filed a complaint with the Securities and Exchange Commission (CySEC), but as yet has not received a reply while the CSE has thrown its hands up, saying they cannot do anything about it.

A senior CSE official told the Financial Mirror that banks in particular have been complaining that they cannot monitor and have access to trades occurring on their stocks by custodian services, who refuse to reveal the ultimate beneficiary as the trades occur.

“Trades done by custodian services need to be cleared after three working days (T+3) for the listed companies to find out who bought and who sold,” the CSE official said.

No wonder then that many sophisticated traders and investors in Cyprus have decided to shift to trading stocks on the Athens Stock Exchange and other reputable exchanges where such ill-practices are not allowed to take place, and when they are revealed, action is taken by the authorities to protect investors.

The allegation that buy and sell orders are withdrawn, added or adjusted when the identity of the particular investor trading on the stock is revealed is disturbing since it proves that with the exception of a couple of stocks, the price of most titles on the CSE is fixed or tightly controlled by the majority stakeholders.

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