Market Regulation supervises trading in Seed SEF’s markets. Supervision is accomplished by analyzing trade activity and market fundamentals to identify and prevent potential rule violations.
Trade Practice surveillance is defined as the direct monitoring of exchange transactional data, including orders and executed trades. Trade Practice surveillance uses automated alerts and T+1 reports to monitor trading activity for potential rule violations. Rule violations in the domain of Trade Practice include: Front Running, Trading Ahead, Trading Against Customers, Fictitious Sales, Wash Trading, Market Manipulation, Disruptive Trading, Fraudulent Acts, Money Pass and Accommodation Trading.
Seed’s market surveillance program is intended to preserve the orderly functioning and integrity of Seed’s markets. Seed preserves the functionality of its markets by identifying situations that could pose a threat of manipulation and initiating appropriate preventive actions. Seed’s market surveillance program regularly collects and evaluates market data to determine whether markets are responding to the forces of supply and demand. Assessing supply and demand means tracking the fundamentals of Seed’s products. For example, in hemp Seed monitors for cash market prices, acreage of crops planted, import/export volume, storage costs, shipping costs and any other relevant data. Each day Seed market surveillance staff monitors the daily activities of large traders, key price relationships, and relevant supply and demand factors in a continuous review for potential market problems. Areas of focus for Seed’s market surveillance program include: price and volume monitoring, fundamentals monitoring and index and convergence monitoring.
If you have information about a violation of Seed SEF rules you may file a tip or complaint with Seed SEF’s Market Regulation Department. Please send an email with as much detail about the potential violation as possible to [email protected]. Complaints may be made anonymously, however if you do not wish to remain anonymous please provide your name and contact information.
Seeds SEF’s surveillance program has automated tools to monitor its markets in real time. These tools help us address scenarios where potentially malicious, fraudulent, unfair or unorderly trading activity is underway on the Seed SEF trading platform. The goal of the Seed SEF’s real time surveillance is to identify activities that are in violation of CFTC Core Principle the goal of which is to promote “a fair and orderly marketplace.”
Market Regulation investigations generally originate from either complaints, real-time or T+1 surveillance, or research performed by Market Regulation staff. When reviewing complaints, surveillance material, and research, the Investigations team typically requests information from the trading members and other firms involved. At the conclusion of an investigation, the Market Regulation determines whether a formal investigation should be undertaken. All parties involved are notified and given a chance to respond to any allegation.