| Imperial Date 006-1107 |
| Date 01-02-1107 |
ESM regulator investigating Efex mistrade. The ESM regulator, Boerse LIC, has told NTV News that it has commenced an investigation into an apparent mistrade on Efex, the local derivatives market. The mistrade sent the EAX future tumbling 15% recently as well as triggering ripple effects across other capital markets. The regulator said it had initiated the investigation and would reconstruct the Efex trading activity to determine whether a mistrade had taken place. The investigation would take some weeks before an outcome would be available, it said.
The regulator doesn't have the authority to impose sanctions but should a suspicion of wrongdoing exist, the case would then be referred to the public prosecutor's office of the CPO. A spokesman for the regulator declined to comment on the possible outcome of the investigation. Just after the mistrade took place, the EAX future plunged 800 points within seconds from 5165 points to around 4350 points. More than six hours later, Efex canceled all trades on the EAX futures contracts which had occurred below the 5083.5 point level. In addition, Efex canceled Efate Stoxx futures trades below the 3726 point level.
Boerse LIC has been heavily criticized by market participants for its slow response. Some trading houses said they were considering taking legal action against Efex and are demanding that their contracts are honored. Losses arising from the mistrade have been estimated at between MCr20 and MCr40.
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