Prohibited Trading Practices

Customers of GTN are prohibited from engaging in manipulative trading strategies, practices or patterns.  If, upon a review by GTN’s Compliance Department, GTN finds patterns or practices that, in its determination, raise questions regarding the propriety of any Client’s trading behavior, GTN reserves the right to take action that may include contacting the Client for further information and, where appropriate, terminating client access and or reporting the activity to the appropriate regulatory authorities.

General Principles of Manipulation: The term “manipulation” in the context of the federal securities laws means activity that is intended to artificially affect the price of a security or to convey a misleading impression of trading activity in, or the depth of the market for, a security. A finding of manipulation will depend on the intended purpose of the market activity. If market activity is for a bona fide trading purpose and any change in the appearance of the market (e.g., the price of the security) resulting from the activity may be characterized fairly as incidental or an unavoidable by‐product of the activity, no manipulative purpose is likely to be found.   If, however, the market activity is designed primarily or solely for the purpose of creating a particular market appearance, especially if it would benefit the person or entity engaged in the activity, manipulative intent is likely to be found. Whether the conduct actually affected the price of the security is irrelevant; the focus of any inquiry pertaining to manipulation is intent.

Specifically Prohibited Trading Activities: The following are among the activities that are specifically prohibited:

• Activities to Induce Others to Trade. Purchases or sales, or the entry of orders for the sole purpose of inducing market activity in a particular security by others.
• Wash Sales. Trades that result in no change in beneficial ownership of a security, or that cancel each other, and are entered into for the purpose of creating a false or misleading appearance of active trading.
• Matched Orders. Entry of one or more buy (sell) orders with the knowledge that one or more sell (buy) orders for the same security in substantially the same size and at substantially the same price have been (or will be) entered at the same time by or for the same or different parties for the purpose of creating a false or misleading appearance of active trading.
• Prearranged Trades. Trades that involve an offer to sell (buy) a security coupled with an offer to buy (sell) back that security at the same or better price without any bona fide trading purpose.
• Marking the Close/Influencing the Open. Marking the close occurs where one or more trades are either executed or falsely reported at or near the close of trading with the intent of affecting the closing price of the security. Influencing the open is a manipulative practice in which a market participant attempts to give the impression of increased trading volume and/or price behavior.
• Trade Shredding. Any conduct that has the intent or effect of splitting any order into multiple smaller orders for execution or any execution into multiple smaller executions for transaction reporting for the primary purpose of maximizing a monetary or in kind amount to be received by the Firm or its associated persons as a result of the execution of such orders or the transaction reporting of such executions. “Monetary” or “in kind” amounts include credits, commissions, gratuities, payments for or rebates of fees, or any other payments of value to the Firm or its associated persons.
• Phantom Orders. Order or series of orders in which market participants enter buy or sell orders in a particular stock with the sole intention of artificially influencing the market.
• Painting the Tape. Causing fictitious transaction reports to appear on the tape.
• Price manipulation. Anonymous orders for large numbers of shares, which are then canceled in order to give the impression of high interests in a security.

Quote Layering Manipulation: All activities conducted with the intent of manipulation are strictly prohibited. Activities which include, but may not be limited to, directly entering multiple quotes on one side of the market, or entering multiple orders on the buy or, sell side of the market, with the intent of manipulating trading markets to move in one direction or another, a practice sometimes referred to as “Quote Layering,” “Quote Stuffing,” or “Spoofing” is considered manipulation, and as such, is strictly prohibited. If, upon review, GTN finds patterns or practices that, in its determination, raise questions regarding the propriety of any Client’s trading behavior, GTN reserves the right to take action that may include contacting the Client for further information and, where appropriate, terminating client access, and or reporting the activity to the appropriate regulatory authorities.

Odd‐Lot Trading Practices: Certain odd‐lot trading activities are prohibited in U.S. markets, and that your firm is responsible for ensuring that its odd‐lot activity is in compliance with regulatory requirements. It is important that you understand and familiarize yourself with all applicable rules governing odd‐lot trading in order to ensure proper compliance, including NYSE Rule 124, AMEX Rule 208 and NYSE Arca 7.38, as well as other regulations that address prohibited acts relating to odd‐lot and or mixed‐lot order entry. The following is a list of some, but not necessarily all, of the prohibited trading activities found in those rules:

• Unbundling round‐lots for the purpose of entering odd‐lot orders in comparable amounts;
• Failing to aggregate odd‐lot orders into round‐lots when such orders are for the same account or for various accounts in which there is a common monetary interest;
• Odd‐lot trading not consistent with traditional odd‐lot investment activity, including index arbitrage activity, certain types of program trading, trading in security classes not usually involved in odd‐lot trading (i.e. REITS, certain narrowly‐based structured products, GTN.) or any pattern of activity that would suggest the day trading of odd‐lots;
• Entering both buy and sell odd‐lot limit orders in the same stock before one of the orders is executed for the purpose of capturing the spread in the stock;
• Prearranged or wash sale trades of any kind;
• Determination of whether or not the activity is for the beneficial ownership of an individual account or multiple accounts; and
• Other types of trading activity that is not consistent with traditional odd‐lot investment activity, including index arbitrage, certain types of program trading or any pattern of activity that would suggest day trading ‐ not including “PRL’s” (part of round lots).

Non-Bona Fide Trading as Disruptive Activity. Your traders should only enter bona fide orders. Quoting should be done to enable trading, and orders should be entered with the expectation that they will be filled. Placing quotes or entering orders should be done to change a position, not to induce others to participate to trade, affect the price or create misleading conditions. Although we understand that some orders do not get filled or are modified or cancelled in light of a perceived or real change in market circumstances, entering non-bona fide orders could constitute disruptive activity and may violate federal securities laws.  The main focus is that your traders should not engage or effect trading or quoting activity that improperly disrupts the trading of securities. Disruptive Activity can result from conduct that is intentional, reckless or negligent by entering non-bona fide orders

Please make any of your authorized traders aware that if we determine that their activity results in situations where GTN deems that the orders are non-bona fide, GTN reserves the right to disable that trader. You and/or your traders are required to provide their trading strategy both in a general sense and for a specific trading pattern. Failure to provide adequate information regarding strategies or particular pattern may result in GTN disabling the account and/or the trader in question.

Collusive / Cross Market Trading Activity: Collusive behavior involves any arrangements by traders at the same firm, or traders at different firms, where one trader enters non bona fide orders to give a false appearance of activity while the other trader enters bona fide orders, that may or may not receive an execution, that take advantage of the non-bona fide quoting activity of the first trader.  As indicated, this can be accomplished by traders at the same firm, or traders at different firms.

Any instances where GTN believes that this activity occurs, GTN reserves the right to disable your access to trading.

Please direct any questions you may have to GTN’s Compliance Department at compliance@gtnamericas.com.

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If you have any questions about this policy, please write, call, or email us.

4509 Creedmoor Road, Suite 201

Raleigh, NC 27612 United States

Call us: +1 332 230 1184

Email: compliance@gtnamericas.com