Twitter icon Email alerts icon Latest News RSS icon Magazine icon Stay connected:

View the article online at http://citywire.co.uk/wealth-manager/article/a741881

FCA bans & fines trader for QE gilt price manipulation

by Dylan Lobo on Mar 20, 2014 at 11:22

* Between 09:00 and 14:30 on 10 October Stevenson significantly increased his holding of the relevant gilt – which accounted for 92% of the gilt’s turnover that day

* Given his significant market experience he was fully aware of the impact this would have – and traded with the express intention of increasing the gilt’s price.

* By 09:39 others in the market had highlighted this unusual activity to the Bank, with one trader noting that this appeared to be a deliberate attempt at 'pushing the price higher in order to sell… later in the day'. 

* The price and yield of the bond significantly outperformed similar gilts on 10 October 2011 as a direct result of Stevenson’s trading. Stevenson stopped buying the bond at 14:30, whilst QE was underway.

* At 14:56, the Bank took the unprecedented step of announcing that it would not purchase the affected gilt, following significant changes in its yield that day.

* By 15:30 the gilt’s performance had completely reversed, and by the end of the day its price was back in line with comparable bonds.

Sign in / register to view full article on one page

leave a comment

Please sign in here or register here to comment. It is free to register and only takes a minute or two.

News sponsored by:

Sponsored Video: Bringing it all back home


As the UK coalition government strives to rebalance the national economy, so called 'reshoring' looks set to play an increasingly important role in economic recovery.

Today's top headlines

Investing for income in a changing environment


With talk on interest rates on the horizon, our latest roundtable debate covers income investing against a changing backdrop

More about this:

Archive

On the road

Click here to find out more from the Audience Development team.

Read more...

Brewin revenues fall on trail switch

by Danielle Levy on Jul 23, 2014 at 08:15

Sorry, this link is not
quite ready yet