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

Mr George submitted that Mr Creaturo and Mr Kasapis agreed that price discovery was a common and legitimate practice used by market makers – Mr Creaturo agreed that price discovery is a useful process for market makers operating in the BTP market as their job entails providing a price in bonds to clients.

However, the Tribunal concludes that the Information Discovery Strategy as described by Mr Urra and Mr Sheth is not a “price discovery” strategy as that is understood and used in the market. We accept Mr Creaturo’s evidence that price discovery is about validating the fair market value of an asset or security for a given size of transaction and occurs prior to a trade. Mr Urra did agree that his strategy was not what other institutions would call price discovery. We recognise that it was part of Mr Sheth’s case that the strategy he was pursuing was one of price discovery, but prefer the evidence of Mr Creaturo in this regard. Furthermore, the Information Discovery Strategy was not used by others in the market – we accept Mr Creaturo’s evidence that he had not seen anybody else do trades like this, ever.

That other market makers would place orders for price discovery, ie pursue a different strategy, does not therefore assist the Tribunal’s consideration of the Information Discovery Strategy.