Upper Tribunal Tax and Chancery Chamber

UT (Tax & Chancery) UT-2022-000134 UT-2022-000135 UT-2022-000137 - [2025] UKUT 00214 (TCC)

Fecha: 31-Ene-2025

F209 at 10.12.49.319 on 22 July 2016

F209 at 10.12.49.319 on 22 July 2016

662.

This trading activity took place over 38 seconds and involved Small Orders being placed by Mr Lopez and a Large Order being placed by both Mr Urra and Mr Sheth:

(1)

At 10.12.49.319 Mr Lopez placed a Small Order to sell 35 lots for 143.75, iceberged to six.

(2)

At 10.12.56.113 Mr Urra placed a Large Order to buy 450 lots for 143.71, and at 10.12.56.217 Mr Sheth placed a Large Order to buy 250 lots for 143.71.

(3)

The Small Order started to trade.

(4)

When 12 lots of the Small Order had traded, Mr Lopez placed another Small Order to sell four lots at the same price of 143.75, iceberged to three.

(5)

Mr Sheth cancelled his Large Order and Mr Lopez amended the price of both of his Small Orders, reducing them to 143.74, at 10.13.10.874 and 10.13.11.591.

(6)

At 10.13.17.555 Mr Urra increased the price of his Large Order to 143.72.

(7)

Mr Lopez’s Small Orders started to trade again.

(8)

Mr Urra reduced the price of his Large Order back to 143.71.

(9)

The last slice of Mr Lopez’s Small Orders filled at 10.13.22.278.

(10)

Mr Lopez then placed a small order to buy one lot for 143.74, which filled.

(11)

At 10.13.26.859 Mr Urra cancelled his Large Order.

663.

Mr Lopez’s evidence was that the Small Orders were hedges of a cash bond he had just bought, being €5m December 2025 bonds from Cassa Centrale Banca.

664.

The coincidences of timing are:

(1)

Mr Lopez’s Small Order did not trade for more than six seconds, after which Mr Urra and Mr Sheth placed a Large Order in the same second (0.104 seconds apart).

(2)

After Mr Lopez placed his second Small Order there was a pause of almost nine seconds of no activity (as the touch has moved away). Mr Sheth cancelled his Large Order in the same second as Mr Lopez amended his Small Orders towards the touch.

(3)

Mr Urra amended his Large Order towards the touch when there was a pause in trading; and moved away once the Small Orders started to trade again.

(4)

Mr Urra’s Large Order was on the market for 30 seconds, and cancelled 0.081 seconds after Mr Lopez’s Small Orders filled.

665.

Mr Shivji submitted that these coincidences in timing are not explained by the Traders’ rationale. Other market participants in a dynamic market would simply see the size at various price points, and that there was significant skew on the buy-side as a result of the Large Orders. He also submitted that the trading in this Instance shows that the trading of the Small Orders was nudged by the placing and amendment of the Large Orders.

666.

The Tribunal observes that this Instance shows the extent to which Mr Lopez was carefully managing the risk on his book – he had initially placed a Small Order to sell 35 lots, but 12 seconds later placed a further Small Order to sell four lots; yet at the very end of the Instance (and we record that Mr Urra’s Large Order was still live at this time) he bought one lot.